Tellabs’ rebound may be postponed. At least one analyst says the equipment vendor, which installed a new chief executive officer last month after a difficult 2007, will have to tough things out for a while longer before conditions improve.

In mid-January, when UBS’s senior telecom equipment analyst Nikos Theodosopoulos upgraded Tellabs’ stock, he imagined the company had hit bottom and would either be acquired and/or recover thanks to a resurgence in spending among US wireless carriers.

But today, while downgrading Tellabs to “neutral,” Theodosopoulos said domestic wireless spending doesn’t appear to be returning as quickly as expected, and a merger doesn’t seem likely anytime soon.

“Following the recent announcement of a 23-year company veteran as new CEO, and with stock prices of potential acquirers, Nortel and Ericsson, down 50% and 20%, respectively, since January, we believe a potential sale of Tellabs is less likely in the intermediate term,” the UBS analyst wrote in a research note this morning. “With Nortel's market cap near Tellabs', Nortel may now be more strategic to Ericsson and Nokia-Siemens given Verizon's decision to migrate to LTE (4G wireless) and Nortel's installed CDMA (2G/3G) base at Verizon.”

As a mid-sized vendor, Tellabs has struggled to compete with larger rivals. The company has won some coveted large-carrier contracts but in some cases sold its gear at nearly break-even prices.

Still, not all signs are grim for Tellabs this week. In another note issued this morning, Morgan Keegan analyst Paul Bonenfant predicted Tellabs’ optical business will continue to benefit from ever-rising network capacity needs--in particular, that related to Verizon’s addition of more high-definition TV channels to its fiber video offering. (A recent Consumer Reports article, otherwise glowing in its assessment of Verizon’s FiOS, noted its comparatively low HD channel count.)

As Verizon adds HD channels, it will need to add capacity to its metro networks, which will require more of Tellabs’ 7100 reconfigurable optical add/drop multiplexers. The 7100 sales to Verizon have been a zero-margin product for Tellabs, but over time, the addition of line cards could bring margins up. “We think Verizon has deployed over 600 [7100] systems, and recently increased its orders by more than 10% to at least triple the footprint,” Bonenfant wrote today. “The data points make us incrementally more positive on the optical business as an offset for other weaknesses.”