Tyco Electronics announced that it has agreed to buy broadband equipment manufacturer ADC Telecommunications Inc for $1.25 billion in cash. The company said that acquisition would support its aim of expanding into the market for consumer electronics products, such as smart phones, 3D television and video conferencing. The company is betting on future demand for fiber optics and diversifying away from its historical automotive connector business.

ADC Telecommunications' products include copper and fiber optic cables and network access devices, enabling the transfer of high speed data. ADC Telecommunications reported sales of just under $1 billion in 2009, of which approximately a third is related to fiber related product sales.

Tyco Electronics (see Tyco Electronics SWOT Analysis) is a global provider of engineered electronic components, network solutions, undersea telecommunication systems, and wireless systems. The company has over 100 production facilities in 25 countries and serves customers across 150 countries. The company operates in the Americas, Europe, Middle East Asia, and Africa. Tyco is headquartered in Schaffhausen, Switzerland and employs about 78,000 people. The company recorded revenues of $10,256 million in the financial year ended September 2009 (FY2009), a decrease of 28.6% compared with FY2008. The operating loss of the company was $3,474 million in FY2009, compared to an operating profit of $1,663 million in FY2008. The net loss was $3,256 million in FY2009, compared to a net profit of $1,782 million in FY2008.

ADC Telecommunications, Inc. (see ADC Telecommunications SWOT Analysis) is a communication service provider across the globe. The company is engaged in the delivery of high-speed Internet, video, data, and voice services to residential, business and mobile subscribers throughout the world. The company operates in more than 130 countries and provides facilities around the world including locations in Australia, the United Arab Emirates, the UK, the US, Venezuela, and Vietnam. In August 2008, ADC has signed a wireless distribution agreement with Crossover Distribution, a major Canadian distributor of wireless, telecom and CATV solutions based in Mississauga, Ontario.

While in the developed markets, Fibre-to-the-Home will be the leading infrastructure force behind this economic and social transformation; mobile broadband will deliver these changes in the developing world. Nobody needs to miss out on these benefits as long as governments take a leadership role both in developing infrastructure and trans-sector policies.

FttH infrastructure investments (telecoms and smart grids) should be deployed in such a way as to create a social and economic multiplier effect for a whole range of sectors that use it independently of each other, including healthcare, education, energy, water, transport and community services, as well as for entertainment and high-speed Internet access.

These broadband networks must be based on a national vision and in this regard, Australia has become a great example for other countries. It was the first country in the world to implement such a vision; thanks to the government leadership supporting the roll-out of a National Broadband Network (NBN). The USA soon followed and is now showing real leadership as well, along with a few other countries around the world.

Author: Paul Chapman, Analyst