ADTRAN Buys Cable Market Share With Sumitomo EPON Acquisition

ADTRAN today took immediate ownership of much of the world's EPON market with the acquisition of Sumitomo Electric Industries' EPON technologies and resources, and a distribution pact that opens up Asia to ADTRAN's family of solutions.

Although financial terms of the acquisition remain undisclosed, ADTRAN purchased EPON products and platform from Sumitomo, and hired the large Japanese vendor's North American sales, research and development, support and other employees, said Jay Wilson, senior vice president of Technology and Strategy at ADTRAN, in an interview with Broadband World News today.

Sumitomo will continue to conduct R&D on its EPON products, as well as market and sell those lines, in Japan and the rest of Asia, he noted.

"A big part of the benefit here is we want to leverage each other's strengths," said Wilson. "We will be collaborating on R&D. We have a normal, regular cadence of meetings between the parties, both on the sales side and the development side, to keep those coordinated. A big topic of those discussions will be roadmap alliance and feature priorities."

For example, Sumitomo's customers in Japan such as NTT may seek different feature prioritization than North American MSOs like Comcast or Charter, he said. As each vendor's customer requirements change, the partner's research developments could give the other an advantage over local competition, Wilson added.

"[The acquisition is] a lot about customer traction and momentum, but also to show we're serious about being a player in cable access," he said, noting ADTRAN spoke confidentially with a few North American Sumitomo MSO customers prior to inking the deal to answer questions and ensure current cable clients were comfortable with the acquisition.

The distribution agreement with Sumitomo gives ADTRAN immediate access to the Asian market, an area where ADTRAN's presence has "been somewhat limited," Wilson said. Having focused primarily on North America and EMEA, the agreement gives Sumitomo access to ADTRAN's entire portfolio -- although the Japanese company has mostly expressed interest, to date, in solutions such as the ADTRAN SD-Access portfolio, including the ADTRAN Mosaic cloud platform, NG-PON2 and Gfast technologies.

Instant foothold
Indeed, the deal gives ADTRAN an immediate foothold within the fast-growing EPON market, especially the increasingly popular 10G EPON arena, Julie Kunstler, principal analyst for broadband access at BBWN sister company Ovum, told BBWN.

"Sumitomo is the leading vendor of 10G EPON OLT [optical line terminal] port shipments to North American cable operators. This follows their strong position in 1G EPON OLT shipments dating back a good number of years," she said. "Sumitomo has been one of several EPON equipment vendors to several Japanese operators -- both telco and cable."

The overall PON equipment market is expected to grow to $163.5 billion by year-end 2023, a compound annual growth rate of 20.7%, according to Transparency Market Research. Service providers deploy EPON for backhaul carriage services for 3G and 4G mobile infrastructures, while cable operators use EPON to complement existing Ethernet deployments, the research firm wrote.

In particular, 10Gbit/s PON is garnering a bigger foothold as it gains popularity among providers, wrote Jeff Heynen, director of Sectors and Technology at SNL Kagan Consulting.

Asia-Pacific is a high-growth region for PON deployment, TMR said. While China generates a lot of headlines due to its sheer size, Japan and India are hungry for EPON and other PON solutions to support their consumer populations and businesses, the researcher said.

Related posts:

• Virtualizing the Subscriber Experience
• Despite Tough Q4, ADTRAN Grows in 2017
• SD-Access: The Foundation for Transformation

— Alison Diana, Editor, Broadband World News. Follow us on Twitter @BroadbandWN or @alisoncdiana.

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