Nynex seeks alternate fiber network suppliers
Nynex seeks alternate fiber network suppliers
In the aftermath of Ericsson Raynet`s plans to lay off some 300 employees in its corporate offices in Menlo Park, CA, and to consolidate manufacturing operations in Sweden (see Lightwave, August 1995, page 3), Nynex, one of the company`s largest customers, is looking at other hybrid fiber/coaxial-cable network equipment suppliers.
According to Walter Silvia, Nynex vice president of broadband marketing, "If Erics son Raynet goes out of business, it`s conceivable that we will not be getting any more equipment from them. As a result, we are looking at alternative suppliers."
From an industry analyst`s perspective, what Nynex is doing may involve a mix of solutions--including both hybrid fiber/ coaxial-cable and switched-digital-video technologies. Virginia Brooks, manager of network access technologies at the Aberdeen Group in Boston, says, "Nynex does not appear to be as aggressive as other regional holding companies. Networking solutions at Nynex often result from what technologies are most easily available. Bell Atlantic and Pacific Bell seem to be the major network implementers and leaders."
Whatever happens between Ericsson Raynet and Nynex, a number of fiber-optic network equipment vendors are waiting in the wings. Among them are ADC Telecommunications, Bloomington, MN; Fujitsu Network Transmission Systems Inc., Richardson, TX; DSC Communications, Plano, TX; Scientific Atlanta Inc., Norcross, GA; and Alcatel Network Systems, Richardson, TX.
Illustrative of vendor reluctance to comment on new business developments-- with Nynex or any other company--a spokesman for ADC Telecommunications would not disclose details about current negotiations between his company and Nynex. However, he points out that Nynex has been a long-time customer of ADC Telecommunications` broadband connectivity products. He notes that 60% of ADC Telecommunications` $450 million in sales last year came from the regional Bell operating companies, but does not single out Nynex from the group.
Andy Meyer, director of marketing for Scientific Atlanta, confirms that his company is discussing architectural issues with Nynex, but declines to comment further.
A spokesman for Alcatel Network Systems also confirms that his company and Nynex have been discussing the replacement of hybrid fiber/coaxial-cable networks by switched-digital-video networks. "We have made technical presentations on switched-digital-video technology, and discussions are ongoing," the spokesman says.
A representative of Fujitsu Network Transmission Systems says his company has had a business relationship with Nynex for the past several years. Nynex deployed Fujitsu synchronous optical network rings in 1994 for an installation in the New York Stock Exchange. Talks are being held about broadband fiber-in-the-loop, switched-digital-video applications.
Nynex`s Silvia says Ericsson Raynet has re-examined its business plan and has shifted the time frame for developing a full-service hybrid fiber/coaxial-cable network. "Depending on the application," he says, "Nynex plans to deploy both hybrid fiber/coaxial-cable networks and switched-digital-video fiber-to-the-curb networks." Other industry sources say Nynex is already an established leader in switched-digital-video fiber-to-the-curb networks, with more than 70,000 to 80,000 subscribers.
Silvia notes that hybrid fiber/coaxial-cable networks have some price advantages in dense urban environments. In suburban, non-rural environments, hybrid fiber/coaxial-cable networks offer significant cost advantages. Does this mean that Nynex plans to split its network deployments between the two architectures? Silvia says this decision is not final, and it won`t be one-size-fits-all.
Alive and well
Ray McDevitt, vice president of product line management for Ericsson Raynet, refutes talk about his company`s going out of business. He emphasizes that his company is not closing its doors, nor is it abandoning the business relationship it has had with Nynex for the past several years.
"Like Mark Twain`s death, rumors of our corporate demise have been greatly exaggerated," McDevitt says. "We plan to complete our existing programs with Nynex and are certainly interested in maintaining our excellent business relationships. I think what is happening is that differing technologies, such as fiber-to-the-curb and hybrid fiber/coaxial-cable network solutions, are being evaluated by Nynex, and its business plans and solutions are constantly in flux."
As evidence that Raynet`s doors are open and it is aggressively seeking new international markets, McDevitt notes a new Brazilian contract recently signed by Ericsson. The $34 million contract is for supplying a hybrid fiber/coaxial-cable network to Telebahia, a regional telephone company headquartered in Salvador, Brazil. The company will string fiber to the last amplifier in the network.
This turnkey contract was won by Brazil-based Ericsson Telecomunicacoes, an Erics son subsidiary. It includes delivery and installation of access solutions and an operations support system for a cable-TV distribution network reaching more than 250,000 homes. The cable-TV network will be provided with enhanced hybrid access solutions for broadband services in the network. The access installations will be based on the Ericsson Raynet video system.
Gunnar Liljegren, Ericsson Raynet vice president of international marketing, says the company is discussing product deliveries with Nynex. Liljegren confirms reported industry speculation that Ericsson Raynet is investing less heavily in hybrid fiber/coaxial-cable solutions so it can more actively pursue development of switched-digital-video fiber-to-the-curb solutions by 1997. Because market forces are moving toward these solutions, Liljegren notes, Ericsson Raynet is "putting a little less effort into integration for hybrid fiber/coaxial cable and is moving to global switched-digital-video fiber-to-the-curb systems."
There has also been speculation that Erics son Raynet would focus primarily on the international market because Nynex is its only major customer in the United States. Liljegren says his company is going after the market in the United States, but is putting more emphasis on the international market.
If Nynex decides to go with other vendors, it could be a severe blow to Ericsson Raynet, because Nynex is the only regional holding company that uses substantial volumes of that company`s gear. Raynet supplies Nynex with broadband hybrid fiber/coaxial-cable network gear for Warwick, RI, and Somerville, MA, deployments. q