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Adtran-ADVA merger promises better fibre network service for mobile operators

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The consolidated company would have combined revenues of $1.2 billion and jointly save $50 million on running costs

Fibre networking service providers Adtran and ADVA have announced plans for a merger that could create revenues of $1.2 billion – and promise mobile operators better backhaul services. The vendors say the merger is in response to surging global demand for fibre services.

The merger combines Adtran’s fibre access, fibre extension and subscriber connectivity systems with ADVA’s metro wavelength division multiplexing, data centres, business ethernet and network synchronisation systems.

Adtran and ADVA have an agreement to combine their companies into one fibre network builder that can offer global reach to its enterprise clients, which include mobile operators and comms service providers.

Both companies advocate open, disaggregated systems and have a ‘shared vision for the future of fibre networking,’ according to Adtran CEO Thomas Stanton.

Better backbone for 5G infrastructure

“We are in the early stages of an unprecedented investment cycle in fibre connectivity, especially in the US and Europe, fuelled by the demand for last-mile fibre access and middle-mile transport to provide high-speed connectivity to homes, businesses and future 5G infrastructure,” said Stanton. “By joining forces, our combined firm’s portfolio will better position us to capitalise on this compelling global opportunity. We expect the transaction will create significant long-term value for both companies’ stakeholders by increasing our scale and improving our ability to serve as a trusted supplier for customers worldwide.”

The merger is an all-stock transaction in which Adtran shareholders will take 54 ownership and the ADVA shareholders 46 per cent of the combined company, assuming a tender of 100 per cent of ADVA shares. The combined company is to be dual-listed on the NASDAQ and Frankfurt Stock Exchange.

The shared vision of the two companies means that mobile operators can expect a fully integrated network with software services that will fine tune network performance, said ADVA CEO Brian Protiva. Expect a more secure and wider portfolio of services for government networks and critical infrastructure, said Protiva.