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March 08, 2010

Tellabs Report Highlights Growth of Mobile Internet

By Jayashree Adkoli, TMCnet Contributor

Tellabs, a provider of mobile, optical and business solutions, announced that its 2009 annual report, “Fast-forward to the Mobile Internet,” highlighting the company’s performance in 2009, is now available online. The report also focuses for the next year.
Robert W. Pullen (News - Alert), president and CEO of Tellabs, said in the annual report letter that last year the company reduced expenses and increased profit margins. Due to o lower customer spending and increased focus on research and development (R&D) made the revenue to fall by 12 percent to $1.53 billion. The company had applied more than 80 percent of R&D spending to develop innovative mobile, optical and Internet Protocol/Ethernet products during this period.
However, the company grew data product revenue by 59 percent to $342 million, a record high, as well as earned $114 million \ or 29 cents per share, versus a loss of $930 million or $2.32 per share a year ago.
In addition, the company increased operating earnings to $93.5 million USD and also improved gross profit margins to 43.6 percent, which is the best since 2006. The company also boosted operating margins to 6 percent.
Apart from reducing operating expense to $572 million USD in 2009, Tellabs (News - Alert) also generated cash from operations of $234 million and delivered a total return to shareholders of 38 percent, said Pullen.
“We performed well in a challenging economy during 2009. We’re helping our customers succeed, increasing our profits and positioning ourselves to grow with the mobile Internet,” said Robert W. Pullen, president and CEO of Tellabs. “We are seeing positive trends as the world’s economies begin to thaw. People are communicating more and consuming more bandwidth than ever. Customers are spending to meet the growing needs of the mobile Internet, a major trend that will shape the next decade in telecom.”
In 2009, Tellabs also acquired Silicon Valley start-up WiChorus (News - Alert), and its breakthrough mobile packet core platform - SmartCore 9100. This acquisition considerably increases company’s addressable mobile market.
The SmartCore 9100 packet core platform plays a key role in the 4G WiMax mobile packet core market. This platform is used by customers such as Clearwire. Tellabs is positioning this platform for the larger 3G evolved high-speed packet access (HSPA+) and 4G long-term evolution (LTE (News - Alert)) markets.
The company’s focus on innovation is now paying off, said Pullen in the annual report. These growth products and services have generated 36 percent of company’s 2008 revenue and 46 percent of company’s 2009 revenue.
Furthermore, the company expects growth products and services to generate more than half of the revenue in 2010. It also expects first-quarter 2010 revenue to grow compared with first-quarter 2009.
To read on the complete report, visit

Jayashree Adkoli is a contributing editor for TMCnet. To read more of Jayashree's articles, please visit her columnist page.

Edited by Marisa Torrieri

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