Redback Wins Contract From GTE's Genuity for Newest Product
By Erik Schatzker
Sunnyvale, California, May 8 (Bloomberg) -- Redback Networks
Inc., whose shares have surged 11-fold since an initial public
offering a year ago, won a contract from GTE Corp. for equipment
that manages Internet traffic on high-speed networks.
Genuity, GTE's Internet unit, will install one of Redback's
newest devices, which are about half as big as a refrigerator, in
each of six cities by year's end. The equipment, known as the SMS
10000, can handle the Internet traffic from 100,000 subscribers
and sells for as much as $1 million.
The new product has 10 times as much capacity as earlier
versions and is designed to appeal to phone companies with little
space to add networking boxes. Genuity will use it for managing
high-speed traffic on phone lines in Los Angeles, Seattle, Dallas,
Chicago, New York and Washington.
Shares of Sunnyvale, California-based Redback fell 6 1/4 to
63 1/4. The company, which had $64.3 million in sales last year,
has had two 2-for-1 stock splits since its IPO on May 18, 1999.
GTE, based in Irving, Texas, rose 9/16 to 64 15/16 in New York
Stock Exchange trading.
GTE last month said Genuity, the new name for its data-
transmission unit, plans to spend $11 billion to $13 billion in
the next five years to expand its fiber-optic network.
GTE and Bell Atlantic Corp., which is acquiring GTE, plan to
sell 90 percent of Genuity in an initial public offering in a move
to get approval for the combination.
Genuity already is Redback's third-largest customer and had
been trying out the SMS 10000 since the introduction in March.
May/08/2000 16:41 GMT
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