Tellabs, Inc. is a global network technology company that provides networking and communications solutions to both private and governmental agencies. The company offers a range of products and services, including optical transport systems, access systems, managed access solutions, and network management software. The company was founded by Michael Birck in 1974 and is headquartered in Carrollton, Texas. It is currently owned by Marlin Equity Partners, who established an independent business for its product portfolio to accelerate the development of Optical local area network (OLAN) technology. This technology was designed for Enterprise and Government agency clients. OLAN uses fiber, which is faster, more secure, and more stable in comparison to traditional copper infrastructure.
History
Early years
Tellabs traces its roots to a meeting in 1974 over a kitchen table in suburban Chicago. According to company founder Michael Birck, a group of six men with backgrounds in electrical engineering and sales drank coffee and brainstormed ideas for a new telecom company. Their aim was to build a company that offered products and services tailored to customer needs. After raising $110,000 in capital, they incorporated as Tellabs in the spring of 1975; the name combined the idea of telephones and laboratories. The start-up only had a one-man research department, a second-hand soldering iron picked up for $25, and an outdated oscilloscope. In a matter of months, Tellabs began making echo suppressors, which suppress annoying echoes on phone calls. During this time, the founding partners drew no salaries.
The company went public in July 1980, ending the year with sales of $43.7 million. In September 1981, Tellabs introduced the industry's first echo canceller, an advance over the original echo suppressors that synthesized an echo and electronically subtracted it. By 1990, Tellabs had grown to 2,000 employees at 25 locations globally and sales of $211 million.
Tellabs made several acquisitions and expanded globally in the 1980s and into the 1990s, including Coherent Communications Systems Corp. and Martis Oy in Finland. In 1991, the company took a new direction, releasing its SONET-based TITAN 5500 digital cross-connect system. These systems switched traffic from one circuit to another, connecting traffic inside and between networks.
Richard Notebaert, who had led Ameritech, the Midwestern AT&T spin-off until it was acquired by SBC in 1999, took over Tellabs as CEO in September 2000. Pundits labeled Notebaert the “$6 billion man.” However, as the Chicago Sun-Times also reported, the telecom industry also collapsed. The Chicago Sun-Times reported: “Telecom went from boom to bust as venture capital dried up and customers cancelled orders for the sort of equipment made by Tellabs and its competitors, including Nortel Networks and Lucent Technologies.” In 2003, following industry trends and after 28 years as a manufacturer, Tellabs sold its last plant in Illinois and outsourced its manufacturing. The company continued downsizing.
2003 to present
In 2003, Tellabs began offering residential Broadband PON in a partnership with Verizon FiOS. Krish Prabhu, former chief operating officer of Alcatel took over as CEO in February 2004. Prabhu saw opportunities as Internet usage grew demanding faster connections as well as video and better VoIP (Voice over Internet Protocol) calling. Tellabs acquired two companies in 2004. They purchased Advanced Fiber Communications (AFC), a provider of broadband access solutions with a customer base of more than 800 service providers worldwide at the time of the merger in a deal worth $1.9 billion and Marconi Communications North American Access, which sold fiber-access services to regional Bell operating companies and local exchange carriers. At the time of the merger, Marconi had a customer base that included many of the world's largest telecommunications operators, managing more than 4 million lines of capacity and about 1 million deployed lines. By 2007, nearly half of Tellabs' revenue came from products added since 2003.