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Technology Stocks : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: accountant who wrote (11184)	11/5/1998 12:16:00 AM
From: Sector Investor	Respond to of 42804

<<Any guess on the possible revenues? Who would buy the Dynamic DWDM? >> First some basics from a quick search engine search: According to new strategic research from Frost & Sullivan (http://www.frost.com), U.S. Dense Wave Division Multiplexing (DWDM) Systems Market, the market is estimated to experience high growth in the next few years. The compound annual growth rate (CAGR) from 1996-2003 is projected to be 39.4 percent. "The DWDM market is emerging as one of the fastest growing markets in the telecommunications industry," says Frost & Sullivan's Telecommunications Industry Analyst Brian Cotton. "By deploying DWDM technology, carriers are able to increase their network capacity to meet the fast growing bandwidth demand without adding more fibers. In addition, they can expand it on by adding channels when necessary." The phenomenal growth of the Internet and other applications such as e-mail, large fiber transfer, videoconferencing and emerging technologies in the local loop such as digital subscriber lines (xDSL) and integrated services digital network (ISDN) are consuming massive bandwidth in the fiber backbone. Major IXCs are facing the threat of capacity exhaustion in the near future, which can be met by deploying DWDM technology. While DWDM is projected to be a high-growth market, it is likely that the market will be dominated by only a few strategically targeted companies. This trend is reflective of the telecommunications service providers' preference to deal with a single company capable of offering a turnkey solution. In 1996, the first competitive year for DWDM systems, the market was overwhelmingly dominated by the three top competitors, Ciena, Lucent, and Pirelli. However, as an emerging technology, DWDM has attracted the interest of a multitude of companies that are anxious to capture a portion of this lucrative opportunity. Consequently, the market is rapidly taking shape through a wave of new entrants, strategic partnerships, and acquisitions. "As an emerging market, the DWDM system market is somewhat chaotic and unsettled," says Cotton. "The embryonic nature of the industry contains some restraints such as high costs in short haul applications, lack of standards, and the unproved nature of DWDM technology." Cost is one of the most important factors holding off many smaller carriers from implementing DWDM in their network. Especially in the local exchange carriers' (LECs) networks, with many short-haul applications, DWDM systems may not be an economically viable option for bandwidth expansion at this time. The DWDM market consists of systems integrators and component manufacturers. Increasingly, there is a trend for traditional telecommunications systems integrators to acquire or partner with component manufacturers to gain DWDM capabilities. The next several years will likely be marked by a dynamic competitive environment, as DWDM systems manufacturers jostle for a market share of this emerging technology. ***************** More research information can be found in white papers off the Ciena site: ciena.com MRVC's potential customers would be Carriers, CLECs, ISPs, MANs and Enterprises. Lots of competition there of course as these are huge markets, which is where partnering comes in. MRVC appears to have some significant twists to the technology, but just how it could play out is difficult to say right now. We just have to wait.