Industry Update

Oct. 1, 2000
North America

Nortel Networks Corp. (Brampton, Ontario) will acquire Sonoma Systems (Marina del Rey, CA), a high-speed integrated video, data, and voice communications provider, for up to $540 million in Nortel common stock. Per an existing OEM relationship between the two companies, work is already underway to incorporate Sonoma Systems' network-management capabilities into Nortel's network-management system.

Intel Corp. (Santa Clara, CA) will acquire Ziatech Corp. (San Luis Obispo, CA), manufacturer of circuit boards, hardware platforms, and development systems, in a cash transaction valued at approximately $240 million. The Ziatech acquisition supports and expands Intel's Communications Products Group's ability to provide hardware and software Internet building blocks for telecommunications and networking. Ziatech will become a wholly owned subsidiary of Intel, and its 200 employees will become part of Intel's Communications Products Group.

Fiber-optic collimator and isolator manufacturer LightPath Technologies Inc. (Albuquerque, NM) will acquire Geltech Inc. (Orlando, FL) for approximately 823,000 shares of LightPath common stock, valued at $27.5 million. Geltech manufactures precision-molded aspherical optics used in the active telecommunications components market to provide a means to couple laser diodes to fibers or waveguides.

TVC Inc. (Annville, PA), a wholly owned subsidiary of Communications Dynamics Inc. (Hershey, PA) has acquired Amherst FiberOptics (Nashville, TN), a manufacturer and distributor of fusion splicers, splicing services, preparation tools, and related products for fiber-optic networks. Terms of the deal were not disclosed.

Lamson & Sessions (Cleveland), producer of thermoplastic enclosures, fittings, wiring outlet boxes, and conduit, has signed a definitive agreement to purchase fiber-optic conduit systems manufacturer Pyramid Industries Inc. (Erie, PA) for nearly $52 million in cash. The company aims to become a stronger supplier in the telecommunications infrastructure market and expects the Pyramid acquisition to strengthen its presence in this market.

Lucent Technologies (Murray Hill, NJ) has received a $200-million contract from Sprint Corp. (Westwood, KS) to expand the Internet-access capacity of the carrier's network and deliver next-generation Internet services to customers nationwide. Per the agreement, Lucent will supply its APX 8000 Multiservice Access Switch, NavisAccess network-management software, and Network Care Professional Services, including program management, installation, and testing. Sprint will also deploy Lucent's Softswitch Internet Call Diversion solution to route data traffic away from its voice network to prevent congestion and provide its customers with faster access to the Internet.

Williams Communications Group Inc. (Tulsa, OK) has signed three agreements with Telepak Networks Inc. (Jackson, MS). Per the first agreement, Williams will provide private-line services on its fiber-optic network, the largest next-generation network in the U.S. Under terms of the second agreement, Williams will provide global voice services to Telepak, while the third agreement calls for Williams to supply Telepak with dark fiber to link Jackson, MS, with New Orleans. Collocation and network-maintenance services are also part of the third agreement.

International broadband providers 360 networks (Vancouver, British Colum bia) and Global Crossing Ltd. (Hamilton, Bermuda) have announced multiyear agreements that will enable them to expand their respective networks in North America. 360networks purchased a basket of high-bandwidth capacity on more than 13,000 km from Global Crossing. 360networks will obtain multiple OC-48 channels and will be able to offer up to 10-Gbit/sec capacity on selected routes connecting major U.S. cities, including Boston, Los Angeles, Denver, and Chicago.

Tellium Inc. (Oceanport, NJ), provider of in-service intelligent optical switches, will partner with synchronization- and timing-solutions supplier Symmetricom Inc. (San Jose) to integrate Symmetricon's high-precision synchronization clocks into Tellium's Aurora Optical Switch. The clocks are incorporated as a standard feature in Tellium's optical switches.

Datum Inc. (Irvine, CA), provider of timing and synchronization solutions, and Empowered Networks Inc. (Toronto), a network performance and management corporation, have partnered to offer international carriers and enterprise operators a portfolio of products combined with value-added services and management systems. The companies expect their partnership will also play a vital role in the deployment of core network infrastructures in the U.S., Europe, Mexico, Australia, and Asia Pacific.

Intelligent-optical-networking company Sycamore Networks (Chelmsford, MA) and Jabil Circuit Inc. (Auburn Hills, MI), an electronics contract manufacturer of circuit-board assemblies, have reached an agreement in which Jabil Circuit will provide contract manufacturing services to Sycamore for its next-generation transport and switching products. Sycamore expects the agreement to strengthen its ability to bring products to market quickly by integrating external manufacturing processes with internal test and development processes.

Tyco Electronics Corp. (Harrisburg, PA) and British Telecommunications plc (BT-London) have reached a major patent licensing agreement that will permit the implementation of BT's technology in Tyco's products, enhancing Tyco Electronics' Fiber Optic Div. Tyco expects the agreement to strengthen its current line of optical couplers and splitters and complement its passive product offerings.

Fujitsu Business Communication Systems Inc. (Anaheim, CA) has selected General DataComm Industries Inc.'s (GDC-Middlebury, CT) broadband switches and multimedia systems for its integrated voice, video, and data offerings. Per the agreement, Fujitsu will integrate GDC's APEX ATM family of switches with its own SONET product line, EA family of ATM switches, and F9600 Enterprise Voice product portfolio to offer customers voice and data convergence.

Data-communications service provider ClearData Communications Inc. (Boston) has selected Nortel Networks (Brampton, Ontario) as chief supplier and solutions integrator for its national broadband network. Per the three-year, $300-million contract, ClearData will deploy Nortel Networks' Passport and CVX 1800 multiservice access switches, OPTera Metro Multiservice Platform, OPTera Long Haul 1600 Optical Line System, and OPTera Connect DX Connection Manager.

Teleglobe Inc. (Montreal) has purchased approximately $100 million of capacity on the 360networks' (Vancouver, British Columbia.) planned undersea and terrestrial fiber-optic network. 360networks will provide Teleglobe 10-Gbit/sec wavelength capacity on its 17,400-mi network connecting the United States, Bermuda, Brazil, Argentina, and Venezuela.

Per an agreement with Fibernet (Berkshire, UK), Marconi Communications (Pittsburgh) will deliver a network of almost unlimited bandwidth, which will allow Fibernet to deploy such key services as DSL access and IP-based virtual private networks to business customers in 32 cities throughout Germany. Marconi will supply SDH and DWDM equipment as well as its MV36/38 graphical network-management system.

ONI Systems Corp. (San Jose) has received a multiyear contract from Qwest Communications International Inc. (Denver) to provide optical-networking equipment that will support the delivery of high-speed, local broadband connectivity to customers in a major metro market. Qwest intends to build 25 city networks by the end of 2001. Qwest selected ONI's Dynamic Transport System, an optical service-delivery platform comprising of the Online Optical Hardware Platform, the OPTX Operating System, and the OLMP Internetworking Protocol. The first systems will ship this quarter.

Fujitsu Network Communications Inc. (Richardson, TX) has placed a multi-unit order for Digital Lightwave Inc.'s (Clearwater, FL) portable Network Information Computer (NIC) for high-speed optical monitoring and analysis. Valued at approximately $1.3 million, the order comprises a mix of OC-12 and OC-48 models of the NIC, which Fujitsu will use to conduct field-installation testing for its high-speed optical-transport products.

Next-generation Internet service provider Cogent Communications Inc. (Washington, DC) has signed a contract with property management and leasing firm Jamison Properties Inc. (Los Angeles) to equip the Jamison Properties portfolio with all-optical 100-Mbit/sec Internet-access capability. The agreement covers 23 commercial buildings in the Wilshire Boulevard area, encompasses more than 5.6 million square feet, and houses approximately 2,000 tenants.

Optical-fiber and preform manufacturer FiberCore Inc. (Charlton, MA) has received singlemode optical-fiber orders valued at $39 million from existing South American customers. The orders will be filled over the next three years from Xtal, the company's newly acquired facility in Brazil.

The first product from World Wide Packets (Spokane, WA), a Gigabit Ethernet subscriber gateway, has been installed and will be part of extensive beta testing being conducted by the Grant County Washington Public Utility District (PUD). The Grant County PUD pilot project, known as ZIPP, will provide nearly 100 residential test sites in Ephrata, WA, with Gigabit Ethernet broadband connectivity for voice, video, and data over PUD's new fiber-optic network. Involvement in the pilot project represents an interim step in World Wide Packet's product launch; the company plans to announce its initial solution later this year and has scheduled large-scale commercial deployment for early 2001.

Evolution Networks (Atlanta) has built out a high-capacity wholesale network that will enable telecommunications carriers and service providers to more efficiently serve Tier 2, 3, and 4 markets. Focused initially in the northeast United States, Evolution Networks is currently planning for the construction of at least 3,000 route-mi, 25 regional data centers, and 125 points of presence by the end of 2001.

Broadwing Communications (Cincinnati and Austin, TX) has successfully completed a field trial of Corvis Corp.'s (Columbia, MD) 10-Gbit/sec product over a 4,000-km section of Broadwing's nationwide network, from Phoenix to Fort Worth and back to Phoenix, without electrical regeneration. The field trial used Corvis's OC-192(c) product, which supports OC-192c, necessary to provide next-generation 10-Gbit IP services to customers, and OC-192, which supports lower-bit-rate SONET/SDH services.

En-Touch Systems Inc. (Houston) will deploy Marconi Communications' (Pittsburgh) fiber-to-the-curb solution, DISC*S FITL, to master-planned communities in the Houston area, slated to serve up to 40,000 homes. En-Touch will begin deployment of the fiber-to-the-curb solution in its next construction phases.

Yipes Communications Inc. (San Francisco), provider of managed optical IP networks, will begin connecting Atlanta businesses to each other and to the Internet at speeds up to 1 Gbit/sec over its light-speed network. Atlanta is Yipes's second Southeast market and its 12th service region nationwide. Typical customers will include software producers, dot.coms, Internet and application-service providers, Web hosting and collocation companies, financial institutions, professional service firms, and educational and government institutions.

Scientific-Atlanta Inc. (Atlanta) will invest up to $8 million in passive-optical-network (PON) technologies developer Alloptic Inc. (Pleasanton, CA) to co-develop and deliver interactive video, voice, and advanced residential Internet-access services. The two companies have also signed a joint development and sales and marketing contract to develop Gigabit Ethernet residential PON fiber-access products over the next five years.

OptXCon Inc. (Research Triangle Park, NC) has received seed funding from ADVA AG Optical Networking (Munich). The $1-million strategic investment will facilitate the finalization of OptXCon's product plans and drive the future development of its optical crossconnect solutions for metropolitan-area and enterprise networks. OptXCon was founded in March.

Broadband-cable CPE equipment provider Future Networks Inc. (Atlanta) has received $9.1 million in first-round funding, led by corporate investors Corning Cable Systems and Cisco Systems. Private investors include Castlenet Technologies and Chattahoochee Ventures. The company manufactures data modems, available now, and integrated data and VoIP products, which will be available next quarter.

VPI Virtual Photonics Inc. (Holmdel, NJ), developer of software and planning tools for optical networks, has closed its third round of financing with the addition of $20 million in venture capital. Lead investors include Weiss, Peck & Greer and Star Venture, which join previous investors TVM, Alpinvest, T-Venture, and Siemens.

Entridia Corp. (Irvine, CA) has completed the $10-million final segment of a two-stage round of financing, bringing the total equity investment for the company to $40 million. Agilent Technologies Inc. led the financing, followed by S3 Inc., Merrill Lynch, and Bayview 2000. Entridia will apply the funding toward the further development of its optical edge routing products.

Optical-networking provider Astral Point Communications Inc. (Chelmsford, MA) has received an additional $40 million from a series of strategic partner investors to conclude its $80-million third round of financing. Investors include KMC Investment Partners, E-TEK Dynamics, and GE Capital. This round brings the company's two-year total to $113 million.

Tenor Networks (Acton, MA) has completed a $93-million third round of financing, which includes investments from Williams Communications and the venture-capital unit of Tyco International. The new round brings the company's total to more than $120 million since November 1998 and will support Tenor's growth in the areas of sales, customer support, and product development.

Tropic Networks Inc. (Ottawa, Canada) has received $10 million in seed financing, led by Ottawa-based Celtic House and Boston's Kodiak Venture Partners. The company plans to use the financing to further develop its optical-networking technology, establish customer relationships, and add to its core research and development team of IP- and optical-architecture product-development engineers.

Corning Inc. will open a passive-components manufacturing facility in Henrietta, NY. The company will invest $80 million over the next 12 to 18 months to double its production of fiber-based passive components. When fully operational, the plant will employ 440 people. Production is slated to begin in early 2001.

Wafer-scale-integration technology specialist Cierra Photonics Inc. has officially opened its manufacturing facility in Santa Rosa, CA, just 24 weeks after the company's founding. Cierra has grown from a staff of 14 shortly after its founding to 32 as of June, and it expects to have 125 to 150 employees on board by its second year.

Trellis Photonics, an Israel-based company pioneering a solid-state, all-optical network via its patented electroholography technology, is opening its new corporate headquarters in Columbia, MD. While some functions will shift from Israel to the United States, the move is not expected to negatively impact employment in Israel. Trellis will continue to expand its development activities in existing locations in Jerusalem and Yokneam.


German competitive local-exchange carrier TeleBeL (Bergisches Land, Germany) has selected Orckit Communications Ltd. (Tel Aviv, Israel) to supply its FastInternet DSLAM solution as well as DSL network-management and customer-premises equipment. The selection of Orckit's products enables TeleBeL to provide high-speed Internet access to business and residential customers; it is now among the first regional carriers to offer DSL solutions.

Broadband-application service provider EINSTEINet AG (Munich, Germany) has acquired managed bandwidth on Viatel Inc.'s (New York) German national broadband backbone as well as collocation space in all of Viatel's available or planned 14 German collocation centers. The acquisition will allow EINSTEINet to deliver software applications and data-storage services to thousands of additional business customers. Pangea Ltd. (Hamilton, Bermuda) has also purchased capacity-both dark and light fiber-on Viatel's Pan-European network, to expand its capacity throughout Belgium, France, Germany, and the Netherlands.

France Telecom and Intelig Telecommunications Ltd. (Rio de Janeiro, Brazil) have purchased $100 million of broadband capacity on 360networks' (Vancouver, British Columbia) subsea and terrestrial fiber-optic network linking North and South America. Per the agreement, 360networks will provide 10-Gbit/sec wavelength capacity on its planned 28,000-km network connecting the United States, Bermuda, Brazil, Argentina, and Venezuela.

Global Crossing Ltd. (Hamilton, Bermuda) has expanded its existing ATM and frame relay services to Europe with transport speeds available at STM-4 (622 Mbits/sec). Service is currently available to six Euro pean countries but will be extended to 18 cities in France, Germany, Denmark, Belgium, the Netherlands, and the United Kingdom by the first quarter of 2001.

Tele Danmark, the largest network operator in Denmark and a subsidiary of SBC Communications (San Antonio, TX), has agreed to sell 100% of its interest in Tele Danmark Marine to Alcatel (Paris) for EURO 121 million. According to the company, the divestment is a natural consequence of its focused strategy within cellular, Internet, and landline services. In addition, Tele Danmark has announced the selection of Tellabs' (Lisle, IL) DWDM and SDH solutions for its new pan-European network covering Germany, Sweden, Norway, and Denmark. Per the agreement, Tellabs will supply its next-generation DWDM platform and the FOCUS 6200 system as well as the FOCUS AC4 system, a trunk SDH network solution. The entire network will be managed by Tellabs' carrier-class, multivendor FOCUS NM2100 management system.

Norrtdlje Energy and Elcom have selected Net Insight's (Stockholm) family of Multiservice provisioning platform products for use in a regional network stretching from Eland in the middle of the Baltic Sea, through the city of Norrtdlje, and further to Stockholm. The initial order is for eight nodes, and the deal was done via the network integrator Fiberdata of Sweden.

South|Central America

Emergia (Miami), the Telefonica subsidiary that is building Latin America's first broadband submarine cable network, has selected Nortel Networks (Brampton, Ontario) to supply the terrestrial segments that will link the entire continent by connecting Latin America, the United States, and the Caribbean. The network will span more than 23,000 km, linking Brazil, Argentina, Chile, Peru, Colombia, Guatemala, Puerto Rico, and Florida. The first phase of the network is scheduled to begin operation this quarter.

Africa|Middle East|Australia

Independent global carriers' carrier FLAG Telecom (New York) has an nounced that Telecom Egypt has purchased additional capacity be tween Alexandria and New York following the increase in Internet usage in the country. Capacity will reach the United Kingdom on the FLAG Europe-Asia submarine cable system, then to the United States using leased-capacity arrangements provided by FLAG Telecom. Terms of the multimillion-dollar agreement were not disclosed.

NextGen Networks will develop an $850-million national fiber-optic network of approximately 8,400 km in length, extending from Brisbane to Perth via Sydney, Canberra, Melbourne, and Adelaide. NextGen has contracted Lucent Technologies Inc. (Murray Hill, NJ) to provide its WaveStar OLS 400G DWDM system, WaveStar Bandwidth Manager, and TrueWave RS.

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