Suppliers Adva, Ciena, Ericsson could be affected

British Telecom may have slowed spending on its 21^st Century next-generation network initiative recently, according to Simon Leopold, an analyst with Morgan Keegan.

BT did not immediately respond to requests for comment.

“Our checks suggest BT has slowed spending recently, and its 21CN project faces delays,” Leopold wrote in a research note published today. “Within its initiatives, it has pushed back ‘Harmonized Ethernet’ based on demand and network integration issues…We think BT has a substantial metro transport network deployed, yet it remains lightly loaded.”

The slowed spending may already be affecting 21CN equipment suppliers such as Ciena, Adva Optical Networking and Ericsson, he said.

Though BT contributed less than 10% of Ciena’s revenue in its most recent fiscal year, Leopold believes the U.K. carrier may have contributed more than 10% in the most recent quarter, which ended in October, and he believes BT will be a strong customer for Ciena this year.

BT may also be a big reason Adva Optical Networking lowered its expectations for fourth-quarter revenue in mid-December, Leopold said. In November, Adva said “temporary uncertainty from [its] largest customers” weighed on its fourth quarter outlook.

“We also suspect the softswitch from Ericsson has rolled out more slowly than once anticipated,” Leopold said.