Industry Update

Aug. 1, 2001

FiberCore Inc. (Charlton, MA), a manufacturer and supplier of optical fiber and preform for the telecommunications and data-communications markets, announced the acquisition of Data Communications Inc. (DCI-Hyannis, MA). DCI will be merged into FiberCore's Automated Light Technologies (ALT) subsidiary and boost the breadth of the company's technical capabilities used in support of bringing optical fiber closer to the end user. DCI designs, installs, and maintains fiber-optic networks primarily in the Northeast for LAN applications. The purchase price of DCI was $1.1 million and consisted, almost exclusively, of the issuance of 250,000 shares of FiberCore common stock. The acquisition is expected to add $2.5 million to revenues in 2001 and add at least 1 cent a share to FiberCore's earnings in the first full year of ownership.

North AmericaThe Telecommunications Industry Association (TIA-Arlington, VA) has published a new standard: "FOTP-211, IEC 61290-2-3, Optical Fibre Amplifiers-Basic Specification Part 2-3: Test Methods for Optical Power Parameters-Optical Power Meter," TIA/EIA-455-211. This part of IEC 61290 applies to optical-fiber amplifiers using active fibers containing rare-earth dopants. The purpose of this standard is to establish uniform requirements for accurate and reliable measurements via the optical power meter test method.

Sempra Communications, a subsidiary of Sempra Energy (San Diego) announced it will build a 200-mi-long fiber-optic link from San Diego through Northern Mexico ending in Phoenix. The project will provide fiber-optic access to the Tijuana and Mexicali border markets and basic telephone and broadband access to underserved regions of Baja, CA. The international line also will offer increased access to areas east of California that are costly and time-consuming for telephone companies to reach. Construction on the fiber-optic line will begin in September 2001 with completion slated for the end of 2002.

AppliedTheory (Syracuse, NY) completed a series of major network infrastructure upgrades that will further enhance its hosting and access capabilities. AppliedTheory enhanced its network egress capacity across the country with additional OC-12 connections to AT&T's national OC-192 network in Los Angeles, San Francisco, and Washington, DC. The connectivity to AppliedTheory's Web hosting center in Syracuse, NY, was upgraded to a private OC-48 SONET ring provided by Verizon. On the West Coast, a direct OC-3 egress connection to the Sprint network was added to AppliedTheory's Web hosting center in Hayward, CA.

Latus Lightworks (Richardson, TX), a long-haul optical backbone systems developer and part of the Iris Group of companies, will incorporate an L-band version of the Corning PurePath Wavelength Selective Switch in its new ultra-high-capacity optical-network architecture. According to the company, Corning's PurePath Wavelength Selective Switch platform provides access to either individual wavelengths or wavelength bands without predefining channel spacing. This spectrum flexibility enables Latus to provision, process, and add/drop optical signals in either band cost-effectively from a single, remotely configurable device.

Quantum Bridge Communications Inc. (Andover, MA) a developer of optical access networking solutions, announced Sigecom, a broadband utility joint venture offering telecommunications services in Indiana, as its first customer in the utilities marketplace. Sigecom is leveraging its 900-mi fiber-optic network to deliver voice and data services to business customers over the Quantum Bridge Optical Access System.

Mitel Corp. (Ottawa, Ontario) introduced a new identity, Zarlink Semiconductor, under which it will deliver communications connectivity solutions for voice and data networking. Zarlink employs its analog, digital, and mixed-signal capabilities to offer products for wired, wireless, and optical connectivity markets and ultra-low-power medical applications.

Solinet Systems (Ottawa, Ontario), a developer of solutions for the next generation of core optical networks, announced the successful completion of a record-breaking $93-million ($144-million Canadian) round of venture financing, bringing the total venture capital raised by the company to $108 million ($167-million Canadian) in less than 12 months of operation. This funding will allow Solinet to complete its product development and expand operations, marketing, and customer-service capabilities.

Oplink Communications Inc., (San Jose, CA), a designer and manufacturer of passive optical components and integrated optical subsystems, announced a definitive agreement to acquire the assets of privately held Aurora Photonics Inc. (Santa Clara, CA). Aurora Photonics is a pioneer in tunable acousto-optic (AO) technologies and holds six fundamental AO technology patents. The acquisition will enhance Oplink's ability to deliver a broader range of tunable optical components.

OZ Optics Ltd. (Ontario, Canada), a supplier of fiber-optic products for existing and next-generation optical networks, announced the acquisition of Bitmath Inc. (Fremont, CA), a fabless ASIC manufacturer, for an undisclosed amount. Bitmath Inc. designs, develops, and markets ASIC solutions for the broadband communications and optical storage markets. Its designs include intellectual property cores and custom ASICs implementing the forward error correction (FEC) functionality of the G. 709 Digital Wrapper Optical Networking standard as well as analog and digital front-end electronics for optical storage systems.

Cypress Semiconductor (San Jose, CA) has signed a definitive agreement to acquire Lara Networks Inc. (San Jose), a provider of silicon-based packet processing solutions for WAN infrastructure equipment. Lara's products are complementary to Cypress's existing product line for WAN infrastructure equipment, which includes a variety of physical-layer, framing, programmable-logic, timing-technology, and multiport switching solutions for networking line cards.

Corning Inc. (Corning, NY) has delayed the construction of its previously announced Oklahoma City optical-fiber manufacturing facility by approximately 12-18 months. In addition, Corning is slowing the rate of expansion of its Concord, NC plant. The company said the adjustments are necessary to pace its growth in manufacturing capacity and rate of capital spending with current market conditions. These announcements are expected to affect overall fiber manufacturing capacity growth beginning in 2002.

PAIX.Net Inc. (Palo Alto, CA), a neutral Internet exchange and subsidiary of Metromedia Fiber Network Inc., has opened its second San Francisco Bay Area facility. PAIX also announced that the original Palo Alto facility and the new San Francisco facility will be linked so customers can exchange traffic with both public and private peering partners in either site. The San Francisco facility has accessibility to San Francisco metro area fiber infrastructure providers, Class A facility specifications, and space to handle the high demand for Internet connectivity and Internet traffic exchange in the Bay Area.

Global Crossing Ltd. (Hamilton, Bermuda) announced that its Carrier Services Div. has signed a three-year, $37-million contract with Associated Communications Companies of America (ACCA), a consortium of telecommunications companies located throughout the United States. Under terms of the agreement, Global Crossing will provide ACCA members with both voice and data services, including carrier termination, toll-free service, dedicated voice, private line, and IP transit.

Broadband network provider WINfirst (Denver) has selected Harmonic Inc.'s (Sunnyvale, CA) open system solutions for digital headends in Sacramento, CA, and Dallas where WINfirst is building a fiber-to-the-home network. Harmonic has also been contracted to provide professional services, including system design and integration with other third-party technologies supporting the WINfirst interactive TV platform.

Tellium (Oceanport, NJ), a provider of in-service, intelligent optical core switches, announced that it has delivered the Aurora 128 optical switch to Dynegy Global Communications (Houston), the communications segment of Dynegy Inc. Dynegy Global Communications will use the Aurora 128 together with the Aurora Optical Switch in its U.S. long-haul network. Tellium's StarNet Software Suite supports both products and allows Dynegy to seamlessly integrate them into their core optical mesh networks.

Broadwing Inc. (Cincinnati) announced that Teleglobe (Reston, VA) has selected its all-optical switched network as a provider for Teleglobe's network in the United States. Under the agreement, Broadwing will provide Teleglobe with nationwide 10-Gbit/sec (OC-192) wavelength services using Broadwing's all-optical backbone. Broadwing will also supply Teleglobe with collocation, network consulting, engineering services, and local access services.

Philips Broadband Networks Inc. (Chicago) and Wave7 Optics Inc. (Alpharetta, GA) have formed a strategic alliance focusing on developing and promoting high-bandwidth, fiber-deep networks that effectively eliminate the current cost and implementation barriers faced by network operators in deploying fiber-to-the-home and fiber-to-the-business solutions.

1stel Inc. (Cleburne, TX), an integrated service provider of voice, high-speed data, and Web services, will deploy CityStream bandwidth managers from Metro-Optix (Allen, TX, and Santa Clara, CA) in its fiber-optic network build-out over the next 24 months. 1stel will provide simplified voice and data communications by carrying Internet and voice traffic from offices they are collocating into small and medium-sized businesses throughout Texas. WirelessLand Technologies Inc. (Louisville, MI), an integrated service provider of voice, high-speed data, and video services, will also deploy CityStream bandwidth managers in its broadband ATM-based network.

Qwest Communications International Inc. (Denver) has agreed to expand its network using Tellabs' (Lisle, IL) TITAN 5500 digital-crossconnect system to help optimize the performance and utilization of its local network while lowering operational costs. The TITAN 5500 system will provide Qwest with a high-speed transport system that can connect one million phone and Internet sessions simultaneously, so less equipment is needed in the central office.

OpNext Inc. (Eatontown, NJ), a supplier of active optical components and modules, has joined the XENPAK 10-Gigabit Ethernet fiber-optic transceiver multisource agreement (MSA) group. The XENPAK MSA supports the proposed IEEE 802.3ae standard and specifies a uniform form factor, size, connector type, and electrical pinouts for 10-Gigabit Ethernet transceivers. The 16-member companies affiliated with the MSA will independently develop and market 10-Gigabit Ethernet transceivers based on this proposed standard.

Kestrel Solutions Inc. (Mountain View, CA) and TeON Optical Networks Inc. (San Francisco) have signed a letter of intent for Kestrel to acquire TeON. Kestrel and TeON have been developing a common technology for a new generation of advanced optical-networking transport equipment. The Kestrel board of directors has appointed Marty Kaplan as a director and interim CEO.

WaveSmith Networks (Acton, MA) has secured $31 million in second-round financing, with Fidelity Ventures as the lead investor. WaveSmith's A-round investors, Bessemer Venture Partners, Atlas Venture, and Commonwealth Capital, also contributed to the company's second round. The funding will be used to continue the development of the DN multiservice switching product family as well as prepare for general availability in 4Q2001. The DN family is designed to help carriers sustain the growth of their legacy systems and provide the means to leverage that infrastructure into next-generation IP/MPLS services.

EuropeFlag Telecom (London) has awarded Ciena Corp. (Linthicum, MD) a contract to support Flag's North Asia Loop network with Ciena's optical transport and switching systems. Flag Telecom, an independent global carrier's carrier and network services provider, will deploy Ciena's MultiWave CoreStream and MultiWave CoreDirector systems for the Flag North Asia Loop project-a submarine network that spans Japan, Hong Kong, Taiwan, and Korea. Ciena also will supply its MultiWave CoreStream platform on the Flag Europe-Asia cable system, which connects Europe, the Middle East, and Asia.

Alcatel (Paris) and Corning Inc. (Corning, NY) announced the signing of a cross-licensing agreement for photonic components and specialty photonic fibers, in conjunction with a three-year supply agreement for dispersion compensation modules. Corning and Alcatel will permit access to each other's patented photonic component technologies.

KPNQwest (Hoofddorp, Netherlands), a pan-European Internet data-communications company, connected the 4,500-km six-city Nordic Ring of its 20,000-km EuroRings fiber-optic network. The Nordic Ring is the fifth and largest of seven OC-192 self-healing rings in KPNQwest's EuroRings network. It consists of 96 fiber strands, capable of delivering 80 wavelengths per strand at up to 10 Gbits/sec per channel. The six-city fiber-optic network provides connectivity to Stockholm, Copenhagen, Gothenburg, Helsinki, Malmo, and Oslo.

Global Crossing Ltd. (Hamilton, Bermuda) has reached an agreement with CNBC Europe (London) to provide a global digital broadband network for CNBC Europe's programming. Global Crossing will enable CNBC Europe to transmit MPEG video and embedded audio from its headquarters in Fort Lee, NJ, to London and Asia over Global Crossing's fiber-optic infrastructure. Global Crossing Ltd. also announced the final phase of its 25,000-km European backbone network with the connection of Madrid and Barcelona to its Spanish ring. In addition, Global Crossing announced the connection of Geneva to the Lyon-Zurich ring, linking these European business centers with the rest of the world.

Metromedia Fiber Network Inc. (MFN-White Plains, NY) and Deutsche Telekom AG (Bonn, Germany) have signed an agreement by which MFN will provide Deutsche Telekom with optical infrastructure as well as operations, administration, and maintenance services. The 20-year lease agreement will enable a further expansion of Deutsche Telekom's worldwide network platform that connects major cities in Europe, North America, and Asia. MFN will connect Deutsche Telekom's backbone from New York to Washington, DC, and throughout the northern Virginia and New York City metro areas.

MEMSCAP, S.A. (Grenoble, France), a provider of micro-electromechanical systems (MEMS)-based products for the fiber-optic and wireless communications markets, announced the establishment of MEMSCAP Oy, a wholly owned subsidiary in Finland. The subsidiary will focus on the development, commercialization, and sale of active optical components for the metropolitan and access layers of the optical network. The new company, through a relationship with Finland's Optoelectronic Research Center (ORC), will enable MEMSCAP to extend its MEMS- and microstructure-based product line to every segment of the all-optical network, including source components optimized for the growing plastic optical-fiber market. Under terms of the agreement, ORC will license to MEMSCAP immediately commercializable products in the form of resonant cavity LEDs vertical-cavity surface-emitting lasers (VCSELs). It will also provide design and process intellectual property and technology patents, fabrication capacity for low-volume production of laser components, and scientific staff.

France Telecom (Paris) has selected Juniper Networks Inc.'s (Sunnyvale, CA) M160 Internet backbone routers for its points of presence at the heart of its North American Backbone Network (NABN). Designed to address the speed and growing number of smart IP services between the United States and Europe, France Telecom NABN will develop its new service offerings for its major multinational customers (corporate accounts as well as carriers and Internet service providers). Juniper Networks teamed up with worldwide partner Ericsson for the supply, installation, and support of the routers.

Corning Inc. (Corning, NY) announced that TransTeleCom (Russia) has selected Corning LEAF fiber as the optical backbone for the next phase of its long-haul network. Corning will continue to supply LEAF optical fiber through a long-term supply agreement, extending through 2003, with the Russian telecommunications carrier and its cabler, TransVoc.

South AmericaGlobal Crossing Ltd. (Hamilton, Bermuda) announced it has connected Caracas, Venezuela, to its worldwide fiber-optic network and is offering bandwidth and telecommunications services to carriers and multinational corporations in the country. The company is already operational in major telecom markets in the region, including Mexico, Argentina, Brazil, Chile, and Panama. Global Crossing has invested more than $2 billion in building and operating its fiber-optic network in Latin America, of which roughly $70 million is being utilized on current capital expenditures for Venezuela. AsiaFour China Telecom regional operators have selected broadband metropolitan-networking solutions from Nortel Networks (Beijing) to bring the Internet to the provinces of Heilongjiang, Zhejiang, Shandong, and the city of Qingdao. Heilongjiang Telecom will deploy province-wide Nortel's Optical Ethernet solution to provide remote access. Zhejiang Telecom and Shandong Telecom will deploy Shasta 5000 BSNs to provide broadband access user aggregation and value-added services. Qingdao Telecom will use Nortel's Passport 1100 switches to expand its optical Ethernet solution for delivery of high-performance Internet access and services to more than 100 neighborhoods.

FLAG Telecom (London), a network services provider and independent carriers' carrier, and Level 3 Communications Holdings Ltd. (Korea), a subsidiary of the global broadband infrastructure company Level 3 Communications, Inc., announced an agreement with Korea Telecom covering the construction and operation of a landing station in Pusan, Korea, for the broadband submarine cable system currently being developed by FLAG Telecom and Level 3. Construction of the landing station in Pusan is already underway and will be completed later this year.

Sonus Networks (Westford, MA), a provider of voice infrastructure solutions for the new public network, has formed a distribution relationship with Sumitomo Corp. (Japan). Under this non-exclusive agreement, Sumitomo will pro vide the full range of Sonus packet voice products to the Japanese carrier market, including Sonus's award-winning GSX9000 Open Services Switch, the PSX6000 SoftSwitch, the INtelligentIP Soft switch, the SGX2000 SS7 Signaling Gateway, and the Sonus Insight Element Management System.

Africa · Middle East · AustraliaCorning International Corp. (Corning, NY) has entered into an agreement to acquire 50% of Aberdare Fiber Optic Cables (Port Elizabeth, South Africa), a South African manufacturer of optical-fiber cable for the sub-Saharan telecommunications market. Corning Cable Systems (Hickory, N.C.) will man age Corning's interest in the equity company. The transaction will be completed in two stages over the next two years. Corning will continue to supply 100% of the venture's fiber requirements.

Correction In Lightwave's June 2001 "Industry Update" section, p. 22, the headquarters for New World Network Holdings Inc. is Bermuda. New World Network, the principal owner in the Americas Region Caribbean Optical Ring System (ARCOS) cable network, received permission from the Mexican government to land the ARCOS cable in Cancun. The ARCOS shore-end cable segment was installed in Cancun by Tycom Ltd. in April 2001. With the marine installation of ARCOS's Phase I from the United States to Puerto Rico now completed, New World Network is expected to continue on schedule toward completion of the entire 8,600-mi ARCOS ring in the third quarter of this year.