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DEEP RESEARCH · U.S. fiber broadband and the BEAD program

U.S. Telecom Equipment and the BEAD Program: A Fiber Turnaround Memo

A record of the U.S. fiber transition, BEAD budget execution, and the possible turnaround in telecom equipment

Written: 2025-01-24 · Telecom equipment industry memo · Naver Blog

You are responsible for your own investment decisions. This material is research and is not a recommendation to buy or sell.

0. Bottom line first

First, this is not a buy or sell recommendation. It is a record for my own notes. The investment point for telecom equipment is broadly the same: the sector has been beaten down for a very long time, and this may be a bottoming and turnaround phase.

I had already written about this while investing in HFR, but a telecom equipment industry report came out today, so I am sharing the summary. The sector has continued to post losses, but from 2025 it may begin to recover, and the magnitude could be meaningful.

Report image related to U.S. telecom equipment and the BEAD program

1. Why I looked at HFR

Although HFR is not included in this report, there are reasons I selected it. The company had already completed certification for manufacturing facilities in the U.S., and there seemed to be technically attractive points going forward. I also considered the fact that this is an industry already developing in Japan.

Interpretation: Apart from the broader telecom equipment turnaround thesis, U.S. certification status and technological differentiation become important checkpoints when looking at individual companies.

2. Expansion of the U.S. fiber transition

Official fact: According to the original summary, the U.S. internet market is rapidly shifting from legacy cable to fiber communications.

  • Current U.S. fiber penetration was summarized at about 20%.
  • Korea’s fiber penetration was cited at about 90%.
  • Because U.S. penetration is low compared with Korea, the growth potential is large.

3. Overview of the BEAD program

Official fact: The BEAD program was summarized as a major Biden administration infrastructure investment with a budget of about $42.4 billion, or roughly KRW 60 trillion.

  • Its goal is to close the digital divide in rural and low-income areas.
  • Priority deployment of fiber cables was presented as the central direction.
  • Funding execution is expected to accelerate from the second half of 2025 through 2026.
U.S. broadband investmentLow fiber penetration and digital-divide reduction
DemandShift from cable to fiber
PolicyBEAD about $42.4B
Execution2H 2025~2026
CompaniesTelecom equipment turnaround candidates
When policy funding and infrastructure replacement demand overlap, equipment-company earnings recovery becomes the key point to monitor

4. Risks and opportunities

Opportunity

Program continuity

Although there were concerns about whether the BEAD program would continue, the summary states that the chance of cancellation under a Trump administration is low.

Risk

Budget reallocation

There is a possibility that part of the budget could shift to satellite or fixed wireless access, or FWA.

Timing

Execution phase

The key timing is the potential acceleration of funding execution from the second half of 2025 through 2026.

5. Prior HFR memo

I am summarizing the report here and leaving my previous HFR-related blog post as a reference link: https://blog.naver.com/star_of_self/223734336639

Preview image for the prior HFR blog link

Sources

Naver original