- The rural broadband hype is dying down for equipment vendors
- Vendors are eyeing opportunities in long-haul fiber and the data center
- Vendors poured money into expanding manufacturing in the U.S., and more economic concerns lie ahead
Fiber vendors have long been banking on the promise of revenue opportunities via BEAD and rural broadband expansion, but the hype is simmering down in light of fiber's uncertainty in the new administration. As a result, communications equipment vendors are eyeing greener pastures.
For the most part, vendors are “being pretty quiet about the BEAD opportunity because so much is still up in the air,” said Dell’Oro Group VP Jeff Heynen. Then again, they figured delays were inbound ever since the election results, so they had time to brace themselves.
“At a minimum, they are saying that they will be ready when the BEAD projects are funded and underway,” Heynen told Fierce. “But in the meantime, they will continue to chase other, global opportunities, just as they have been the last few years.”
Vendors adjust strategies amid BEAD uncertainty
Speaking on the company's Q4 earnings call, Adtran CEO Tom Stanton said plainly that the BEAD program is “not a big driver” for 2025 revenue.
"Investment remains strong” from service providers in both the U.S. and Europe that are upgrading and expanding their fiber footprint. On the optical networking front, Adtran gained 18 customers in the quarter, which included a mix of fiber broadband providers, large-scale enterprises, government agencies and utilities.
The broadband operator customers are, in some cases, upgrading their backhaul networks to 100G or regional transport networks to 400G or 800G, Stanton noted.
“I think the BEAD question itself is still out there, but it's becoming less and less a part of people's near-term plans,” Stanton said.
Despite the $42 billion on the table, the BEAD funding is “just a tiny tip of the iceberg” in the fiber broadband space, Tim Dyer, CommScope’s VP of market development and private networks, told Fierce at MWC 2025. There’s a lot of private equity money flowing through the market as well, he said, and Deloitte tipped PE firms to become even more active in 2025.
Aside from waiting on BEAD, CommScope has been a busy bee. The company made headway in the cable access space last year when it acquired Casa Systems for $45.1 million Casa Systems, plus it's in the works to launch a private 5G product. And like its peers Nokia and Corning, CommScope is eyeing ways to tap into booming data center demand.
Corning in its recent investor event talked quite a bit about how its optical fiber tech can go beyond fiber-to-the-home deployments. Specifically, it wants to get rid of the remaining copper lurking in data center servers and replace it with fiber. However, Corning is still hopeful about BEAD although “we won’t predict the next steps in its evolution,” a spokesperson told us.
“As the largest fiber optic cable manufacturer in the U.S. with end-to-end passive optical solutions, we're well-positioned to capture demand from BEAD and other programs with Build America, Buy America requirements,” said the Corning rep.
Vendors navigate market shifts
The BABA requirements, which were included in the 2021 Infrastructure, Investment and Jobs Act (IIJA), stipulate that certain fiber components, like optical networking terminals (ONTs) and optical networking units (ONUs), must be produced in the U.S.
Many of the major vendors, like Nokia, CommScope, Corning and India-based STL, have expanded their U.S. manufacturing presence in the last few years to adhere to these federal regs.
Indeed, with more satellite and fixed wireless access deployments on the horizon, the companies that could face the biggest impact to their business are “the U.S.-based contract manufacturers who were ramping up their capacity to support the manufacturing of BABA-compliant products,” Heynen said.
To add to the challenging market conditions, there’s the oh-so-exciting prospect that vendors may have to retool their global supply chains due to the U.S. government’s tariffs. This uncertainty was capped by a report from Dell'Oro noting that global telecom infra was down across the board in 2024, and Dell’Oro predicted 2025 will remain a challenging climate for vendors.