3/17/98 Wall St. J. Eur. 6
1998 WL-WSJE 3512667
The Wall Street Journal Europe
Copyright (c) 1998, Dow Jones & Company, Inc.
Tuesday, March 17, 1998
Corporate News
Sprint Chooses Ciena For Transmission Gear
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Equipment Will Expand Data-Carrying Capacity As Demand Surges
By John J. Keller
Staff Reporter
Sprint Corp. chose Ciena Corp. to supply high-capacity fiber-optic gear that
should dramatically expand the data-carrying capacity of Sprint's national
network.
Like many carriers, Sprint is racing to upgrade its network to meet
increasing demands for data transmission from new services such as Internet
access and video conferencing. On the equipment side, Ciena is waging a pitched
battle against larger rivals such as Lucent Technologies Inc. to maintain its
leadership in a transmission technology called wavelength-division
multiplexing.
Sprint's data-transmission needs are growing exponentially. A spokeswoman
noted that the company's revenue from data transmission by businesses grew 60%
in the fourth quarter.
Within two years, the company estimates, its revenue from providing long-
distance data services to businesses will be equal to what it now garners from
providing voice and data services. "Capacity is of critical importance," a
Sprint spokeswoman said.
Under the three-year supply contract, Ciena will supply Sprint with its new
MultiWave 4000 system. In its first year the Lithicum, Maryland-based equipment
supplier expects to receive more than $100 million in orders from Sprint, said
Patrick Nettles, Ciena's president.
The agreement should put on notice network upstarts such as Qwest
Communications International Inc. and others that established carriers such as
Sprint aren't taking the data challenge lying down. The new breed of carriers
brag that their systems will be low-cost transmitters offering more efficiency
than networks such as Sprint's. But Ciena's system should allow Sprint to
expand the number of transmission channels on each of the optical fibers in its
network to 40 from 16. This would boost Sprint's data-carrying capacity on each
fiber to 100 billion bits per second from 40 billion bps. If needed, Sprint can
boost the system's capacity to 96 channels just by changing the electronic
cards on the systems, Mr. Nettles said. "That's plenty for years to come," he
said.
The contract with Sprint also highlights the rivalry among competitive
equipment suppliers. Lucent recently announced that it would ship an 80-channel
wavelength-division multiplexing system by the end of the year. "We're out
first," Mr. Nettles said. "And our system offers an immediate 96 channels of
capacity if the carrier needs it."
By the looks of things, the explosion in data should offer enough business
for most service and equipment suppliers. Calls for faster transmission from
computer users, especially for services such as Internet access and
increasingly popular video services has sparked an explosion in data needs.
Data transmission is growing by more than 35% on a compound annual basis
compared with 10% or less for voice services such as phone calls. And this
growth is expected to accelerate. WorldCom Inc., which has a huge data
business, has said it is currently experiencing a tenfold increase in annual
data growth, far outpacing voice-services growth.
Sprint, which is based in Westwood, Kansas, plans to begin deploying the
systems in April.
---- INDEX REFERENCES ----
COMPANY (TICKER): CIENA Corp.; Sprint Corp. (CIEN FON)
NEWS SUBJECT: Non-Government Contracts; World Equity Index (CTC WEI)
MARKET SECTOR: Technology; Utilities (TEC UTI)
INDUSTRY: Communications Technology; Long Distance Telephone
Providers; Telecommunications, All; Telephone Systems (CMT
LDS TEL TLS)
PRODUCT: Telecommunications (DTE)
REGION: Kansas; Maryland; North America; United States; Central
U.S.; Eastern U.S. (KS MD NME US USC USE)
LAYOUT CODES: Corporate News; Large Majors; Business and Finance Column
Stories (CNS LMJ TPT)
Word Count: 473
3/17/98 WSJ-EURO 6
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