Tellabs reported a drop in first-quarter revenue today driven by weaker sales of fiber-to-the-curb (FTTC) equipment to BellSouth following that carrier’s acquisition by AT&T.

Tellabs reported first-quarter revenue of $452 million, down 12% from a year earlier and in line with the average expectations of Wall Street analysts following a warning from the company in January. Revenue from its broadband segment was down 16% from a year earlier to $219 million in the first quarter. Within the broadband segment, revenue from access products was down 26% from a year earlier to $121 million.

In January, Tellabs said it had been working with BellSouth on possible plans to upgrade the 1.5 million lines of fiber-to-the-curb (FTTC) that are currently served by Tellabs gear. But BellSouth’s new ownership by AT&T cast some uncertainty on that initiative, Tellabs’ chief executive officer Krish Prabhu said then. “We have worked closely with BellSouth to identify a roadmap to IPTV on those 1.5 million lines. Is it a hope or a plan? For now, we don’t have an identified, agreed-to plan. We’re waiting to hear what AT&T’s [capital spending] plans are for 2007.”

On this morning’s conference call, Prabhu was more tight-lipped, declining to speculate on customer intentions. When asked whether AT&T would likely spend less on FTTC gear this year than BellSouth did last year, he said, “Don’t know yet. Two of our top 10 customers have suppressed spending with us. I don’t know what they spend with others.”

Prabhu said he’s seen “no snap-back” in spending from AT&T, BellSouth and Cingular Wireless following the merger that prompted spending pauses in the fourth quarter. Those comments stand in contrast to those of Adtran executives last week, who reported a return of big-carrier spending in the first quarter.

At an investor conference in February, Tellabs’ chief financial officer Tim Wiggins said AT&T was “very interested” in its 1150 multiservice access platform, which was designed to support a variety of fiber access architectures as well as to allow a migration from FTTC to FTTN. Several customers are trialing the 1150, Tellabs said today, and some unannounced customers have purchased it. In particular, Tellabs expects the 1150 to be popular with independent operating companies, it said today.

Revenue from Tellabs’ data products was up 32% from a year earlier to $29 million in the first quarter. Transport revenue was down 11% to $191 million.

The vendor expects second-quarter revenue to be up 10% to 15% sequentially, attributing the growth entirely to $60 million to $70 million in deferred revenue from its 7100 reconfigurable optical add/drop multiplexer (ROADM), sold “at essentially a break-even margin,” Tellabs said.