Fairpoint Communications (FRP) plans to spend $781M over the next 5 years maintaining and upgrading the network they purchased from Verizon. Drilling into the details of the network spending suggests Occam Networks (OCNW) is well positioned to materially benefit from this proposed deployment. Details provided by Fairpoint and fundamental metrics of the Broadband Loop Carrier business lead us to believe Occam will recognize up to $125M in revenue, of which $80M will come in the next 18-24 months, provided Fairpoint executes it’s current capex plan.
Adtran reported surprisingly good numbers and made specific comments that indicate the Great North American capex freeze of 2007 is thawing in a few areas. The company also had interesting things to say relative to access market growth and trends in the Enterprise portion of their business.