Small telecom equipment manufacturers, like Alvarion Ltd. (ALVR), Arris Group (ARRS), ADC Telecommunications (ADCT), and Anaren Inc. (ANEN), are expected to benefit from the $7.2 billion Broadband stimulus fund granted by the U.S. government under the Rural Utilities Service program.

The American Reinvestment & Recovery Act contains provisions that encourage telecom operators to apply for grants, loans and guarantees to assist them in deploying un-served and under-served communities for broadband access. Telecom-gear makers and infrastructure-solution providers will help the regional/rural telecom operators to plan, design, and implement broadband networks.

Recently, Alvarion received a five-year contract from Open Range Communications Inc, a U.S. wireless operator. The total contract size is more than $100 million. Alvarion will provide radio-access equipment, customer premises devices and systems integration for Open Range’s broadband wireless network deployment spanning 17 states, 546 rural communities that may reach out to a population of 6 million.

Arris Group has decided to assist cable operators in preparing their applications for the Broadband Stimulus fund. Arris has a strong presence in the rapidly growing cable modem, cable modem termination systems (CMTS), and embedded multimedia terminal adapter (E-MTA) markets.

ADC Telecommunications, a leading connectivity solutions provider for copper, fiber, and wireless network, is also likely to be benefited. We expect increased spending by telecom carriers for next-generation fiber-based networks and wireless networks to boost demand for connectivity solutions, especially in the local loop areas.

Demand is also likely to grow for the products sold by Anaren, a provider of microwave components and subassemblies for the wireless industry. As a pioneer in high-frequency electronics, Anaren’s base-station antenna and lightweight components/subsystems can be used by rural telecom operators cost effectively.

We remain bullish on Alvarion, and ADC Telecom, and maintain our Hold rating for Arris Group, and Anaren.

Read the full analyst report on “ALVR”
Read the full analyst report on “ADCT”
Read the full analyst report on “ANEN”
Read the full analyst report on “ARRS”
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