DZS to acquire Optelian to expand 5G play

DZS Inc. (NASDAQ: DZSI) has announced an agreement to acquire optical transport systems vendor Optelian for an undisclosed sum. The deal is expected to close in the next 30 days, according to DZS CEO Charlie Vogt, who says Optelian’s metro/regional optical network hardware will complement his company’s Layer 2/3 packet transport systems for mobile network support.

The deal also provides access to 100-Gbps coherent technology, which DZS plans to extend to 400 Gbps in the future, Vogt said in an interview alongside CTO Andrew Bender and CMO Geoff Burke. DZS plans to recast Optelian’s product line as the “O-Series,” with the recently released DA Series disaggregated optical transport platform a primary element (see “Optelian unveils DA Series 1RU disaggregated optical platform”). Vogt and Bender said that 100G is becoming increasingly important to 5G network plans while also gaining relevance in other types of broadband access networks.

Outside of the technology aspects, which include R&D reinforcements, the acquisition of Optelian would provide access to North American Tier 1 customers where DZS has yet to gain traction; while five of the world’s largest mobile network operators use DZS technology, the majority of those are in Asia, Burke allowed. It also opens the door to adjacent markets, as Optelian has pitched its products for data center and utility network applications as well.

Vogt asserts the addition of optical transport hardware to its product portfolio will distinguish DZS from other companies focused on DZS’s primary niche, which he described as edge access mobile and broadband. Looking forward, Vogt says he sees opportunities in the replacement of Huawei gear, Open RAN, RDOF, and further penetration of North America and Europe. Vogt believes that DZS is now in position to walk through these doors after an initial period in which he focused on fully integrating DZS’s disparate parts when he came aboard last August (see “Charlie Vogt to lead DASAN Zhone Solutions transformation as new president and CEO”). Vogt also has brought in several new people in management positions (see, for example, “DZS expands team, replaces two executives” and "DZS adds Matt Bross, Barbara Carbone to board"). With the necessary foundation in place, “our Number 1 priority right now is growth,” he stated.

Optelian, founded in 2002, is headquartered in Ottawa, Ontario, Canada. Its products include C/DWDM systems, muxponders, and ROADMs, which it has supplied to four of the five largest Tier 1 service providers in North America as well as more than 50 other customers.

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