Is Stimulus Plan Slowing Spending on Telco Gear?

Spending on telecommunications equipment has apparently slowed down in anticipation of pending details on a piece of that the government stimulus that will provide incentives for building out the nation’s broadband network, according to Avi Cohen, head of research at Avian Securities.

Cohen points out in a note to clients that Adtran (ADTN) execs asserted on their post-earnings conference call yesterday that the prospect of government subsidies apparently curtailed spending by Tier 2 and Tier 3 carriers and cable providers in the first quarter. The theory: companies opted to wait on capital spending projects until policies on incentives were clear.

As Cohen notes, there will be two sources of the added government funds.

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