Tim,
Do you have any comments on the following article? You seem to have a good understanding of DWDM systems. I would be interested in hearing your opinions.
Thanks,
MikeM(From Florida)
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NEW YORK, July 30 (Reuters) - Shares of CIENA Corp. fell more than 3 percent in heavy trading Thursday after the telecommunications equipment company said AT&T Corp. had changed the specifications for a type of equipment it may buy, analysts said. CIENA spokesman Denny Bilter said AT&T is looking for a more powerful global optic networking system than the CIENA product it had been testing. CIENA first disclosed the information in a filing with the Securities and Exchange Commission.
AT&T had been testing CIENA'a 16-channel dense wavelength division multiplexing (DWDM) system. DWDM is a method of increasing the capacity of fiber optic phone lines and data networks. "AT&T recently indicated that their capacity requirements have grown to such an extent that they will not be deploying 16-channel. They will shift to an accelerated evaluation of higher-channel systems," Bilter said.
"We believe AT&T will evaluate our 40-channel system, and we believe we are the only supplier with a 40-channel that is commercially available," he said. "Over the short term, it means...we won't be receiving income for the fourth quarter" from sales to AT&T of a 16-channel system, Bilter said.
The change in AT&T's needs could delay the timing of potential contracts or give another company the chance to develop a 40-channel product, analysts said. Michael Neiberg, a telecommunications equipment analyst with Furman Selz, said, "The only company with a 40-channel system is CIENA. But the change is some additional uncertainty...there's been a change in what is going on with AT&T. And is the change for the better or the worse? It's too early to tell."
Earlier this year a CIENA rival, Lucent Technologies Inc, unveiled an 80-channel system called WaveStar OLS 400G. At that time, AT&T said it needed both 16- and 80-channel systems. Now, analysts suggest, AT&T may select a 40-channel product and an 80-channel product.
"Back in January we said we would be future-proofing our network," said AT&T spokeswoman Ruthlyn Newell. "Among the things we cited was wave division multiplexing...and that we would be moving toward an 80-wavelength (-channel) system and testing it by the end of this year." She added, "This particular technology is leapfrogging and expanding rapidly...we continuously communicate to our suppliers our technology needs." AT&T said it will "engineer its network as it makes sense" and may not put the same type of DWDM technology in all parts. Rural areas, for example, may not need as much capacity as cities. |
