AT&T (T) To Deploy Open ROADM, Boost Optical Network Suite

AT&T Inc. (NYSE:T) is reportedly planning to deploy Open Reconfigurable Optical Add/Drop Multiplexer (ROADM) and optical SDN initiatives to its live network. The deployment will be done using multiple vendors and an optical SDN controller integrated into AT&T’s Enhanced Control, Orchestration, Management and Policy (ECOMP) virtualization platform, the first of which will be done in Dallas.

The ROADM technology helps to automatically manage and adjust optical bandwidth on high capacity fiber optic lines. AT&T already uses ROADMs and SDN controller for its internal management purposes. Now, the telco is gearing up to apply the same to its live network, enabling its customers to detect and modify bandwidth automatically, depending on the network congestion in different locations. As of now, it will be extended across limited coverage of AT&T’s network. Eventually, it will be standardized for use within and between metro areas.

The Open ROADM concept was taken up by AT&T at the Optical Fiber Conference (OFC) held in March 2016. Therein, AT&T collaborated with Ciena, Fujitsu and Nokia (HE:NOKIA) to create a Multi-Source Agreement (MSA) for Open ROADMs. At present, the Open ROADM MSA is a 15-member association of operators and equipment developers. The team is currently working on third generation features, including higher rate wavelengths.

Besides AT&T, Ciena, Fujitsu and Alcatel-Lucent (PA:ALUA) USA (now a subsidiary of Nokia), other members of the association include SK Telecom, Orange S.A., Rostelecom, Cisco, Saudi Telecom Company, Coriant, Telecom Italia (MI:TLIT), Juniper Networks (NYSE:JNPR), Deutsche Telekom AG (DE:DTEGn), Infinera Corporation and KDDI.

We expect investor focus to remain on the outcome of the reported deployment, which should enhance the telco’s optical network operations. We further appreciate the fact that AT&T is turning its software-centric attention to its optical networks with such initiatives.

We also look forward to seeing how far AT&T succeeds in simplifying optical network operations by deploying Open ROADM and optical SDN initiatives.

Zacks Rank & Key Picks

AT&T is a Zacks Rank #3 (Hold) stock.

Some better-ranked stocks in the broader Computer and Technology sector include United States Cellular (NYSE:USM) , Harris Corporation (NYSE:HRS) and Intel (NASDAQ:INTC) Corporation (NYSE:T) . While United States Cellular sports a Zacks Rank #1 (Strong Buy), Harris and Intel carry a Zacks Rank of #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The projected earnings growth rates (3-5 years) for United States Cellular, Harris and Intel are 1%, 6% and 8.4%, respectively.

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