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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: CJ Quantumwell who wrote (3415)	2/22/1998 5:00:00 PM
From: Roger A. Babb	Read Replies (2) \| Respond to of 18691

CJ, thanks for the telecom insights. I went long CIEN Friday on the dip because I think they have very good management and will recover from the dip in the short term. But it is not a long term play at these prices.

To: CJ Quantumwell who wrote (3415)	2/26/1998 8:46:00 PM
From: craig crawford	Respond to of 18691

<< However, it has been close to a year that CIEN doesn't have the highest capacities in the industry >> Having the highest capacity does not equal the best solution. Yes, Nortel has 16 channel WDM at OC-192, but OC-192 is not viable in all networks and some carriers don't want to hassle with running OC-192. For example, AT&T has some of the oldest fiber around, which isn't suitable for running OC-192. CIEN's WDM solution will work better for them, and they represent several $100's of millions in WDM business. Some carriers have decided to stick with more channels at OC-48 rather than upgrade to more complex and expensive OC-192 speeds. (Bell Atlantic for instance). << Nortel also have 160Gb/s demo done and CIEN says it will have 40 channel DWDM at 2.5Gb/s , ie. , 100Gb/s which will not be the leader in capacitywise and it is not easy to achieve with current components they have >> What makes you think it is so much easier to do 16 channel OC-192 than it is to do 40 channel OC-48? CIEN is the WDM leader and will remain that for a while. Worldcom (soon to be joined by MCI), Sprint, and AT&T aren't going with CIEN because they are inferior. Furthermore Nortel isn't going after the short-haul market the way CIEN is. They are dragging their feet. CIEN will probably capture the early lead in this market and it will be that much more difficult to dislodge them. The same factors that work in the networking sector will apply to the WDM sector as well. Carriers won't want to switch WDM vendors around the same way they don't want to change networking vendors. Just like customers don't like to yank out Cisco routers and try something new, they won't want to play musical chairs with WDM equipment. AT&T has been testing CIEN WDM equipment for around 9 months now and they still probably won't deploy CIEN WDM until the second half of 1998. It will be very difficult for other WDM companies to work their way into accounts where CIEN has been beta-testing for months. Even if someone came out with a superior solution to CIEN's WDM it would more than likely take several months to over a year just before someone like WCOM or AT&T would put it in their networks. Like you said, telephone companies don't take their networks lightly. They need flawless operations and a network going down can mean millions in lost dollars.

To: CJ Quantumwell who wrote (3415)	3/8/1998 5:15:00 AM
From: craig crawford	Respond to of 18691

<< However, it has been close to a year that CIEN doesn't have the highest capacities in the industry. ( the bragging right) Nortel can do 80Gb/s in one fiber and CIEN can only do 40Gb/s. ( only commercially available products count)However, this fact is usually ignored by the CIEN bulls. Nortel also have 160Gb/s demo done and CIEN says it will have 40 channel DWDM at 2.5Gb/s , ie. , 100Gb/s which will not be the leader in capacitywise and it is not easy to achieve with current components they have. >> This link will explain to you why less channels at OC-192 is not necessarily better than more channels at OC-48 ans.alcatel.com