SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?


To: The Phoenix who wrote (52263)8/18/1998 4:12:00 PM
From: djane  Read Replies (1) | Respond to of 61433
 
The Great Cisco Wars. Equipment makers beef up for fighting an 800-pound gorilla

americasnetwork.com

August 15, 1998


By Alan Pearce

Until recently, merger madness did not afflict the
equipment segment of the industry. On the whole, the
long-established and extremely conservative telecom
equipment manufacturers--Lucent Technologies, Motorola,
Nortel, Siemens, Alcatel, Ericsson, NEC and Fujitsu--have
steadfastly protected and served their embedded base: the
national and regional, wireline and wireless, telecommunications carriers.

But all trends change, and this one has changed abruptly, in large measure
because of the growth of the Internet, the demand for more bandwidth and
faster speeds, and the rapid migration from circuit switching to packet
switching. It is this background that explains the following developments:

Nortel, one of the largest central office (CO) switch suppliers, plonked
down $9.1 billion to buy Bay Networks, a leading data networking
company. Bay Networks is a minor competitor to Cisco Systems (but
more about that later).
Tellabs bought Ciena Corp. for $7 billion. Tellabs manufactures
bandwidth control equipment, while Ciena is a leading manufacturer of
optical networking equipment.
Alcatel acquired DSC Communications for $4.4 billion. Here, Alcatel is
anxious to gain U.S. market share (as are other offshore companies).
Lucent Technologies paid $1 billion for Yurie Systems Inc., an
asynchronous transfer mode (ATM) access equipment manufacturer.
Lucent is suffering from acquisition handicap for the next several months,
because it is forbidden from 'pooling of interests' in tax accounting for its
acquisitions. This means that, until October, Lucent only can use cash
(as opposed to the power of its stock) to engage in the merger-madness
that is compelling equipment manufacturers to consolidate.


Enter the new king

The important question is, Why is all of this happening now? The answer is two
words: Cisco Systems.

Cisco is one of the amazing success stories of the 1990s. Its market value has
gone from next to nothing to about $100 billion, closely challenging Lucent's
market value of $130 billion-plus. Cisco's success is so complete that it is
regarded as a company without serious challengers in the enterprise networking
market. Enterprise networking equipment enables large companies to
communicate within themselves and with other companies at fast speeds and
over networks that have the ability to offer bandwidth on demand.

Cisco is feared by the established telecom equipment manufacturers, because
they believe that Cisco is now ready to sell equipment to traditional telecom
carriers. So, largely out of competitive necessity, the manufacturers are getting
ready to take a run at Cisco.


As the MCI ad says, is this a great country, or what?

Cisco's success is based primarily on its Internet protocol (IP) routers, and it
has become what many believe to be the 800-pound gorilla in the data
networking arena. Cisco sets de facto standards and relegates the competition
to minor roles. Now that the market appears to be peaking (it certainly is not
growing at the rapid rates of the past and is becoming more competitive),
Cisco must look for new markets so it can sustain its staggering growth--and
keep its stockholders happy.

That's why Cisco is eyeing the public networking market and is ready to take
on the likes of Lucent, Nortel and others as the major carriers begin to deploy
packet-switched networks. Cisco is regarded as the expert in packetized
networking, even though Bell Labs developed the technology. But the old
AT&T learned at great cost that developing the technology is one thing--selling
a product that people are willing to buy is another.

The urge to merge

Lucent, Nortel and the others are wondering whether Cisco has such an
intimate understanding of data networking that they have no option but to
spend money to acquire knowledge and information so they can protect their
increasingly vulnerable embedded base. Serious product delays can mean
death in an equipment market that is in the midst of major change. So expect a
continuation of the merger trend as the leading manufacturers try an end-run in
a bid to erode Cisco's dominance.


It will be an interesting war. Cisco knows a great deal about major business
customers who have high-speed and high-bandwidth requirements. Lucent,
Nortel and their colleagues know a great deal about the major
telecommunications service providers that have circuit-switched networks that
depend on CO switches and software related to circuit switching. Now, these
major service providers want to operate their own packet-switched networks.
But who will be their preferred equipment vendor? Early indications are that it
could be a fight to several deaths.

Contributing editor Alan Pearce is president of Information
Age Economics (Washington). Send comments to
anrespond@americasnet work.com.

Top

August 15, table of contents

Copyright 1998 Advanstar Communications. Please send any technical comments or
questions to the America's Network webmaster.




To: The Phoenix who wrote (52263)8/18/1998 4:23:00 PM
From: djane  Respond to of 61433
 
Sculpting the light. Whose hands are shaping today's fiber networks?
[See the article for more links]

americasnetwork.com

August 15, 1998

By Annie Lindstrom

Trying to get a handle on the
plethora of companies that are building
or buying nationwide or large regional
fiber optic networks is a lot like trying to
grab hold of several greased pigs
simultanously. Although lunging after
slippery swine is not a politically correct
thing to do, it would be good exercise
and probably a wonderful distraction for
anyone attempting to digest the
tremendous number of announcements
these companies have made of late
regarding the miles upon miles of fiber
they have deployed or plan to deploy,
or the extra conduits they have buried,
which will someday hold fiber optic
cable.
Get the details
Vital fiber provider statistics
and information:

Nextlink Communications Inc.

Williams Network

Frontier Corp.

IXC

Level 3 Communications Inc.

Qwest International
Communications Inc.

If you laid them end-to-end, the dizzying amount of press releases these
announcements have spawned would probably stretch as far as the combined
route miles of fiber these carriers plan to deploy in the next three years.

If you don't know the difference between major newcomers to the nationwide
fiber optic network game such as Nextlink Communications Inc., Williams
Network, Frontier Corp., IXC, Level 3 Communications Inc., Qwest
International Communications Inc., never fear. In this first of a two-part series,
AN ferrets out the facts: who these carriers are, what they want and how they
aim to get it. We will profile what what makes them similar and different from
one another. We interviewed high-ranking officers at 11 companies that are
burying, swapping, purchasing the rights to or leasing large amounts of fiber to
provide retail or wholesale services on a nationwide or large regional basis to
other carriers, businesses or consumers, or all of the above.

We will conclude our two-part series in Sept. 1, with information on large
regional carriers, some of whom are expanding nationwide, including Advanced
Communications Group Inc., Electric Lightwave Inc., GST
Telecommunications, Intermedia Communications Inc., and Metromedia Fiber
Network Inc.
_____________________________________________________________

americasnetwork.com

WILLIAMS NETWORK

Headquarters: Tulsa, Okla.
Company age: 8 months
Retail or wholesale: Wholesale
Fiber deployed: 12,800 route miles (11,000 on two fibers retained on WilTel
network, which was sold to WorldCom, and 1,800 route miles on new
network between Houston/Washington; Los Angeles/New York; and
Phoenix/Chicago). By year-end, 18,000 route miles will have been deployed;
22,000 route miles by the end of 1999.
Network size when completed: 32,000 route miles by year-end 2001
Investment in network to date: $700 million when completed: $3 billion
1997 revenues: $1.4 billion for parent company, Williams Communications

Global plans: Have indefeasible right of use (IRU) on AC-1 Atlantic undersea
cable but no European assets. Making investments in South America and
Australia. The company is evaluating its international strategy and potential
partners.

Identity and mission: To become the leading provider of wholesale services
domestically and internationally in 100 cities by year-end 2001. The carrier is
building on a strong domestic base that Williams has been serving since 1995
on its 11,000-route- mile, two-fiber network. Carrier will serve as a
complement to tier-one interexchange carriers (IXCs), RBOCs, Internet
service providers (ISPs) and CLECs. Employees are encouraged to think
globally and focus on wholesale.

Current status: In January, Williams re-emerged from a non-compete
contract with WorldCom. Williams is bringing a similar set of carrier-class
offerings to market nationwide.

Fiber status: Building the Williams Broadband Multi Service Network, a
21,000-route-mile, OC-192, four fiber bi-directional line switched ring
(BLSR) network.

Core architecture: Asynchronous transfer mode (ATM) and dense wave
division multiplexing (DWDM) architectures.

Strategy and differentiation: Williams is evaluating deployment of voice
switches, as voice represents a key ingredient for many tier-one customers. Its
fiber network strategy is to light a single fiber pair at a time and add DWDM as
capacity dictates, then light another fiber pair. The carrier currently leases bulk
capacity on routes where it needs connectivity. A significant amount of capacity
is off-net, but over time Williams will groom those circuits to a new network.
Williams is burying four conduits, all along a new route.

"We are the only network provider that is selling specifically as a wholesaler to
carriers," says Frank Semple, president of Williams Network.

"The fact that Williams has access to and is constructing its network along
38,000 miles of liquid and natural gas pipeline means that our network is very
secure," Semple continues. "We've never had a cut on our pipeline, and that
makes us significantly different from companies that are constructing their
networks along highways or railroad right of way [ROW]. Our network
architecture is also a key differentiator. It's ATM-centric, not IP-centric like the
networks of some of our competitors. From a technical standpoint, we are
using 40-mile spacing, which allows us to use a higher density of DWDM, than
Qwest, which is using 60-mile spacing."


Copyright 1998 Advanstar Communications. Please send any technical comments or
questions to the America's Network webmaster.

__________________________________________________________________