Tellabs’ humble happiness

DALLAS--Despite an industry in flux and a share price nearing all-time lows, Tellabs doesn’t appear too unhappy with its current conditions. For the company that was once poked and prodded over its lack of sales to the bustling new CLEC market, Tellabs officials are now very happy with their foresight.

“We knew that business model was flawed and that’s one of the reasons we didn’t spend a lot of energy chasing it,” said Stephen McCarthy, senior vice president of optical networking at Tellabs.

The “conservative” strategy indeed proved fruitful for Tellabs, as it held tight on the not so fast moving but now highly desirable RBOC accounts. And now, although the overall pie has shrunk, Tellabs’ market share has gone up. Additionally, Tellabs significant cash reserves and no debt has it on much stronger footing compared to many of larger competitors.

That said, McCarthy acknowledged the industry isn’t healthy yet due largely to the fact that it still carries so much debt.

And as for the once teeming NFOEC, which is limping along in Dallas this week, McCarthy said, “this is the last gasp reflection of an industry that has yet to fully change.”

At the show, Tellabs announced enhancements to its 6500 transport switch that are targeted at helping providers improve operational efficiencies and reduce capital and operating costs by 50%.