Adtran's Health Jolts Telecom Tech

Adtran (ADTN - commentary - Cramer's Take) steals the thunder. It's been a long time since we have had an upside surprise of this magnitude in the telecom business. Not easy to say what's behind it, as Adtran deals with everyone from Sprint (FON - commentary - Cramer's Take) to SBC (SBC - commentary - Cramer's Take). But the fact that it could deliver such strong top- and bottom-line growth tells you that the regional Bells have a pulse.

I wonder whether what we are seeing is a recognition that we have had enough consolidation and that it might be worth spending again for these companies.

Last night, I interviewed Tim Donahue, the most bankable man in the telco industry and soon-to-be executive chairman of the Sprint-Nextel (NXTL - commentary - Cramer's Take) combo. He said point-blank that there is at last enough consolidation for gross margins to rise. And that's before we see what happens to T-Zeta Jones.

It's been the inability to get a payback on equipment that has stymied sales. Maybe this Adtran number indicates a health we haven't seen in some time.

Will it rub off on the others, on the Ciscos (CSCO - commentary - Cramer's Take) and Lucents (LU - commentary - Cramer's Take) and Nortels (NT - commentary - Cramer's Take)? Hard to tell, at least from what we have seen from Lucent, which seemed very in-line (more positive than negative, though).

There was a time when this whole industry was like Adtran and we would sit there and pick and make money.

Maybe this is a sign that something akin to that -- we will never see that level again -- could be on the horizon.

The tech rally continues.

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At the time of publication, Cramer was long Lucent.

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