Despite a false impression left in the first quarter, Adtran is still waiting for AT&T to resume the level of spending it did before the approach of its merger with BellSouth late last year.

The vendor’s broadband access revenue was up 10% sequentially but down 6% from a year earlier to about $20 million in the second quarter, it reported today. Its total revenue for the quarter was nearly $124 million, at the low end of its projected range and essentially even with year-ago levels.

“We haven’t lost market share [at AT&T],” said Tom Stanton, Adtran’s chief executive officer. “The products and the applications we’re selling in to haven’t gone away. As they get to more normal spending levels, we’ll benefit from that, but I’m not getting any specific timeline.”

As for what might prompt AT&T to return to its historic spending patterns, he said, “I don’t know what the trigger is.”

AT&T, including BellSouth, was Adtran’s biggest customer in the second quarter, contributing 24% of the vendor’s revenue, while Verizon contributed 13% and Embarq and Qwest Communications each contributed 11%. AT&T contributed 29% of revenue in the first quarter, but that level may have been inflated to compensate for unusually low spending late last year.

“I think we saw a bottom that was too low in the second half of last year--definitely in [the fourth quarter],” Stanton said. “We saw the results of that in [this year’s first quarter].”

Stanton had allowed for this possibility back in April, when Adtran reported its first-quarter results. “If [AT&T] lower[s] their inventory level and learn[s] how to manage the business at that level, you won’t see a snap-back,” he said then.

Tellabs also reported a drop in spending from AT&T last year that continued early this year. It will report second-quarter earnings next week.

Last month, Morgan Keegan analyst Simon Leopold predicted Adtran’s sales of broadband access gear to AT&T would slow as the carrier’s demand for DSL equipment softened. “We believe high broadband penetration, seasonality and competition from cable TV triple-play [will] lead to reduced demand for DSL gear,” Leopold wrote in a June research note.

This morning, in advance of Adtran’s earnings call, Leopold wrote, “We believe that AT&T’s focus on its Project Lightspeed and Verizon’s focus on its fiber-to-the-premises initiative may distract both customers from spending more aggressively with Adtran, which doesn’t play a role in either activity. However, several opportunities with AT&T, Verizon, and Qwest encourage us that Adtran can deliver improved sales by year-end and into 2008.”

On today’s call, Stanton reiterated that he expects sales of its new Total Access 5000 platform to gain traction among smaller carriers this year and hopes to see significant deployment from major carriers next year.