Sales of Tellabs’ fiber-to-the-premises (FTTP) gear dipped in the third quarter as a major customer (most likely Verizon Communications) made an “inventory correction,” making more use of the gear it had already purchased, Tellabs said.

“We think as our customer gets their marketing campaign underway and signs on more end customers, we’ll start seeing growth back in this program,” said Krish Prabhu, Tellabs’ chief executive officer. “It might happen as early as next quarter.”

Revenue from Tellabs’ access products was down $29 million (or 15%) sequentially and down 3% from a year earlier to $161 million in the third quarter. FTTP and fiber-to-the-curb (FTTC) products accounted for 56% of the company’s access revenue.

“We get blanket orders [of optical network terminals] from customers, and they drop what they need based on the level of inventory in their warehouses,” Prabhu said. “We saw inventory build up in their warehouses at the start of the third quarter. Some of that inventory is being exhausted now, for sure. It’s too early to tell whether the bounce back will happen in the fourth quarter or the first quarter. It depends on the success they have in their marketing campaign.”

In its second-quarter earnings call, the company complained of difficulty predicting third-quarter performance due in part to key customers “selectively managing their inventories.”

The dip in FTTP sales affected Tellabs’ total revenue for the quarter, which was up 13% from a year ago but down nearly 5% sequentially to $523 million.

In the fourth quarter, typically a strong quarter seasonally for Tellabs, the company expects revenue between $525 million and $550 million--a sequential increase between 0% and 5%.