Beneficiaries from Sprint Growth (S)

In a note to clients, Lehman analysts Timothy Luke, Jiong Shao, Jeffrey Kvaal and Marcus Kupferschmidt summarized their impressions from Sprint's analyst day, and looked at key beneficiaries from healthy growth in Sprint’s EV-DO network. Key excerpts from their analysis:

Lucent: Revenue should ramp through its F'06, with F'2H06 meaningfully ahead of F'1H06 revenue track. The 1) fast take-up rate for EV-DO services and 2) Sprint's aggressive plan to expand EV-DO coverage beyond 150 POPs bodes well to Lucent, the leading EV-DO vendor for Sprint.

Tellabs: Sprint's continued demand for wireless capacity should support our estimates for modest YoY sales growth for the 5500 cross-connect in 2006.

Adtran: One driver of expected sales growth in 2006 is likely to be OPTI optical mux shipments to Sprint as base stations are upgraded for more bandwidth to support data services and more capacity.

ADC: Sprint's continued interest in distributed antenna systems (DAS)...should hopefully translate to an eventual rebound in ADC's Digivance sales

Openwave: We note that Openwave derives approximately 20% of its revenues from the carrier, and we believe it is well positioned to benefit from growth in data revenues, particularly through increased traffic flow through its gateway products.

Sierra Wireless: On the data card front, we note that Sierra Wireless is a supplier to Sprint and is targeting 2H06 for availability of a DO Rev. A data cards/modules.

Motorola: Management noted that its first dual mode EV-DO/iDEN handset (most likely a Motorola handset) is expected to launch in October of this year, allowing the carrier to begin transitioning Nextel subscribers to the CDMA network… The primary handset providers to Sprint are Samsung, LG and Motorola (on the iDEN network).