AFC inks $200m Sprint deal

Editor's Note: This story has been updated to correct an error in the ninth paragraph, which should have stated that AFC president CEO John Schofield said AFC’s recent performance on Wall Street does not fully reflect the company’s value. Telephony regrets the error.

Advanced Fibre Communications has signed a three-year, $200 million contract to supply products from the company’s OmniMax product line to a Sprint wholesale arm, Sprint North Supply.

The contract is an extension of a 1997 agreement between AFC and Sprint North Supply that focused on the company’s UMC1000 digital loop carrier.

The new deal, however, includes AFC’s AccesMax integrated multiservice platforms, the Panorama Element Management System, and PreMax integrated access devices.

Sprint North Supply will act as the sole distribution point for these products to other Sprint units, as well as a reseller to non-affiliated carriers.

According to John Schofield, AFC’s president and CEO, this deal is a significant expansion of his company’s already existing relationship with Sprint.

“We shipped about $33 million worth of products to Sprint in fiscal ’99. If you annualize 1999 at $100 million over three years, this represents a doubling of that revenue,” he said. AFC’s total sales to Sprint for 2000 will be announced next week during the company’s fourth quarter and year-end conference call.

This contract, the first announced by AFC this quarter, has been greeted well by investors. As of early afternoon, the company was trading up more than 12% at $21.

The increase is a welcome lift for AFC, which has seen its stock fall with concerns about the market increasing. The company was hit especially hard after a recent downgrade by Deutsche Bank Alex Brown that sent its stock down more than 15% for the day.

Schofield, however, said that AFC’s recent performance on Wall Street does not fully reflect the company’s value, especially since about 80% to 85% of AFC’s sales are to incumbent local exchange carriers, which are more reliable than the competitive and data carriers upon which some vendors focus.

“There are a lot of things that are playing out positive for us that Wall Street hasn’t fully understood,” said Schofield. “We’re not a DSL, DSLAM company, we’re not selling to the DLECs. We’re really an ILEC company.”