If you like fiberless optics/free space optics you can continue to look at Plaintree or you can look into MRVC and their Optical Access Division who work in the same area but (1)have over 3,000 units installed and (2) offer a complete mesh aritecture with 99.999% reliability. Here is a link to a 21st Century Investor release on OA:
Huge potential! An inside look at two of MRV's hottest companies
We recently journeyed to the Networld+Interop trade show to get "on the ground" for a look at the hottest next-gen equipment, and to get a sense of what's going on from management and employees. Luckily for us, two of the most promising companies at the show were part of the MRV Communications (Nasdaq: MRVC) family of companies: Optical Access and Charlotte's Web Networks.
This was the first public look at the reincarnated Optical Access (OA, for short), following the combination of AstroTerra and Jolt, and the addition of many of the product lines from MRV's NBase-Xyplex subsidiary. It's been a convoluted road to get to the current OA, but now the company is fully ready to enter the fray to provide the ultimate high-bandwidth "last mile" solution.
To recap briefly: OA is a pioneering company in wireless laser connectivity, or "free space optics" as it is now coming to be known (companies are trying to avoid that "laser" moniker when the signals are out in the open air). OA is giving carriers and enterprises the ability to bypass the copper connections of the local telco by providing broadband connectivity through laser connections between two points. Essentially, it's "fiber over the air".
The TereScope is the primary building block of OA's last-mile solution -- this is a rugged, weatherproof laser and receiver system that is designed to sit on the roof of a building or in an office window. One TereScope sits on the customer's end, and another TereScope, within a 5 mile range (the range depends on the weather patterns of the area) is hooked into the Internet backbone. Align the lasers, start shooting the signals back and forth, and voila: you've quickly got the equivalent of a fiber-optic connection -- with speeds up to 2.5 gigabits per second -- right through the air. No costly digging in the streets, no delays in provisioning, and no expensive spectrum licenses to obtain. Plus a carrier can just pay as they grow.
It's our belief that speed of provisioning is the absolute key to success in the race to revolutionize the broadband last-mile. Customers want connectivity, and they want it now: nobody wants to wait 3 months or more for a costly T-1 connection from the local telco behemoth, be it Bell South or Verizon or whomever. Trust us, it's a nightmare trying to get broadband access in a hurry.
Optical Access is providing a complete solution for carriers that are looking to deliver connectivity quickly to their customers. MRV is smart to offer a complete solution -- that's what carriers want right now -- and they simply had to reach into their deep well of products to piece together a complete, turnkey access system. They loaded up the new Optical Access with the FiberDriver family of products, courtesy of MRV subsidiary NBase-Xyplex; and they also looted NBase for the OptiSwitch line of high-density fiber-optic switches. The OptiSwitch line also comes with an IP provisioning platform to handle all the traffic engineering and subscriber management functions.
These NBase-Xyplex products have always had a great reputation for innovation and quality -- yet the company has never had a good marketing focus to get these products out to the customer. So it makes sense to bring them into OA at this point. But the main benefit of blending in some of these NBase products is that now Optical Access has some real revenues to load onto the balance sheet. If you'll remember, Optical Access is slated to be MRV's next spin-out company after Luminent (Nasdaq pending: LMNE, the IPO is scheduled for the end of October, but subject to change). OA just filed it's S-1 for an IPO with the SEC. (Nasdaq pending: OPXS). Sales of the OptiSwitch and FiberDriver products will be reflected in the numbers for OA, which is important in establishing the credibility of the endeavor for the IPO.
Optical Access has a better, more complete solution than competitors AirFiber or TeraBeam
Even without the revenues from the switches and fiber groomers, Optical Access would receive a lofty valuation in the public markets. That's because they're presenting the most compelling answer for busting open the bandwidth bottleneck in the last mile. Their solution goes the farthest in overcoming the previous limitations of free space optics.
The big knock on free space optics up until now has been the lack of reliability in certain types of poor weather areas. Heavy fog can wreak havoc with pinpoint laser signals, so network managers have been reluctant to go for these solutions -- up until now. OA is promising 99.999% reliability for their wireless solution. That's going to be the thing that wins the day for OA.
How can they deliver "5 nines" (that's the techie term for 99.999%)? By using a "mesh" architecture, and then throwing in a further back-up layer through the use of unlicensed radio frequency transmission. A mesh means that OA is provisioning a back-up TereScope at each site, pointed to another TereScope in the network, so that there is always a way to route around an outage and get out to the Internet.
We spent some time at Networld going over the advantages of OA's solution with Dr. Eric Korevaar, founder of AstroTerra and now OA's President and Chief Technology Officer. The main takeaway from our chat was the fact that Optical Access has a lot of real-world experience that their main competitors -- TeraBeam and AirFiber -- don't yet have. AstroTerra and Jolt together have completed over 3,000 installations on rooftops all over the world.
Dr. Korevaar told us not to underestimate the importance of real-world experience. When we asked him for a comparison of OA's strategy to those of AirFiber and TeraBeam, he said that both companies look great -- on paper. But out in the field, their plans are going to need a lot of tweaking. TeraBeam's plan to beam through office windows (OA can do this as well, although rooftops are preferred) will have to overcome the serious diffraction effects of the thin-film sun coatings that are in most office glass. For this reason the laser has to be at a precise angle to the window, this limits installation flexibility. Also, he brought up a good point about installing in a window: you only get coverage on one side of the building. Most buildings have four sides. What about the tenant who wants service on the other side of the building?
AirFiber's solution is a big node that sits on the roof, with redundant systems arrayed around a central stalk. The trouble here is the lack of location flexibility -- out on a rooftop, it's not always best to have all your systems in one fixed spot for a mesh system. Sometimes you need to mount near the edge, or route around a tree, or do something creative on the spot. AirFiber won't let you do that.
Optical Access has the most flexible solution, with the greatest range, and the highest bandwidth to boot -- up to OC-48, or 2.5 Gbps. Plus it's cheap and carriers only have to pay as they go. They don't have to spend a fortune up front just to get started. They can add buildings one at a time in a downtown metropolitan area. We think carriers are going to eat it up.
One criticism leveled at OA's rooftop mesh plan is that it's hard to get roof rights, which delays provisioning. TeraBeam's big allure in the minds of a lot of people is that they can install their equipment in your office window right after you call. Well, OA can do this as well, if that's what's needed. But as far as roof rights, that's not a big deal in our minds -- because there are plenty of carriers out there that already have all the roof rights they need -- specifically Winstar, XO (Nextlink), and Teligent. These carriers are certainly not wedded to RF broadband, even though they've spent a fortune on spectrum licenses. If it's easier to use OA's stuff, then they'll transition in a minute.
Interestingly, when we mentioned this natural customer base to a group of OA executives, they all exchanged knowing glances and laughs before giving us a twinkling "no comment". It was hard for them to hide their enthusiasm, and it's clear that a lot of customers are already testing their equipment for deployment.
We expect great things out of OA over the coming year, and this IPO is a guaranteed blockbuster. The best part is that MRV Communications owns 100% of the company, so sometime next year MRV shareholders should receive at least 80% of the shares of Optical Access in a distribution, or the value will accrue to MRV's stock if there's no distribution. Either way, we win. |
