Industry Update

Feb. 1, 2002

Marconi plc (London) has sold its optical-components business to Bookham Technology plc (Oxfordshire, UK) in exchange for 12.891 million ordinary shares in Bookham, equivalent to approximately 9.999% of the current issued share capital of Bookham. The transaction is valued at approximately £19.7 million. Giorgio Anania, president and CEO of Bookham, told participants in a conference call that the acquisition of Marconi's active-device portfolio will complement Bookham's current work in passive components. To get the new combined venture moving in the right direction, the deal also calls for Marconi's optical systems business to buy components and subsystems from Bookham over 18 months with a combined value of at least £30 million.

North America

Cisco Systems Inc. (San Jose) will supply additional ONS15454 Metro Optical Transport Platforms to Williams Communications for installation in the carrier's on-net metro-access networks. Williams Communications currently offers on-net local transport services in 20 metro markets. Services include private-line and wavelength offerings, with plans for metro Ethernet services by early this year. Cisco also announced that its ONS 15540 Extended Services Platform is interoperable with the Compaq SAN Works Data Replication Manager System and the IBM eServer z900 Geographically Dispersed Parallel Sysplex system.

Tellabs (Naperville, IL) will acquire Ocular Networks-provider of next-generation optical solutions for the metropolitan edge-for roughly $355 million in cash and options. The acquisition is expected to be completed in the first quarter of 2002. Tellabs plans to retain the Ocular Networks office site in Reston, VA.

Broadband cable operator Cox Communications Inc. (Atlanta) will deploy hundreds of Riverstone Network Inc.'s (Santa Clara, CA) RS family metropolitan routers throughout all 28 of its U.S. cable systems as part of an extensive program to create its own national high-speed data provisioning system. The multimillion-dollar deployment will take place over the next several months.

Cable & Wireless (Vienna, VA) has activated transatlantic OC-192 links using MPLS technology to connect Washington, DC, and New York with London, Paris, Brussels, Amsterdam, and Frankfurt. The activation enables a business-quality Internet service supporting applications, content, and time- and mission-critical services not normally transmitted over best-effort Internet backbones. In addition, Cable & Wireless and Toronto-based telecommunications company TELUS Corp. have agreed to offer Canadian businesses high-speed dedicated Internet connectivity services via Cable & Wireless's global IP network. Per the agreement, TELUS becomes the exclusive reseller for Cable & Wireless's service in Canada.

Enterprise-class software developer VPIsystems (Holmdel, NJ) has entered into an alliance with Telcordia Technologies Inc. (Morristown, NJ), a provider of operations support systems, that will yield a new suite of flow-through tools from network planning to engineering. The new product suite is designed to help network planners collaborate with technical marketing groups to ensure that end users get the best technology and service mix.

Bandwidth9 Inc. (Fremont, CA) has entered a joint development agreement with Metro-Optix (Santa Clara, CA, and Allen, TX) to integrate its MetroFlex tun able transmitter into the Metro-Optix City Stream bandwidth management platform. The combined system is designed to ease the burden of network management on today's metropolitan service providers by lowering equipment costs, increasing service flexibility, and providing an integrated platform to deliver a mixture of voice, Internet, and other data services.

Cypress Semiconductor (San Jose, CA) has announced working prototypes of an internally developed parallel optical transceiver module. The resulting technologies will be used to develop next-generation optical transceiver and transponder modules for high-bandwidth interconnects in next-generation switches and routers. The technologies and prototype were co-developed by Cypress and Silicon Light Machines, Cypress's optical subsidiary. The product should be available for sampling by the middle of this year, according to Mathew Arcoleo, senior product marketing manager of optics at Cypress.

Startup NanoOpto Corp. (Somerset, NJ) has received $16 million in Series A funding to produce "subwavelength optical elements" that it claims will pack multiple functions into devices of extremely small size. NanoOptics will base its activities on research conducted over the last two decades by Dr. Stephen Y. Chou of Princeton University. Dr. Chou founded the company and also serves as chairman. Barry Weinbaum, president and CEO of NanoOpto, says the company will use Dr. Chou's techniques to produce elements with feature sizes smaller than the wavelength of light. As an example, Weinbaum cites one element that is 10 nm wide.

NEC Corp. (Tokyo) and Wavesplitter Technologies Inc. (Fremont, CA) have entered into a joint sales and marketing agreement for active fiber-optic components and modules. Per the agreement, Wavesplitter will market and sell the NEC active product portfolio, including optical transponders, optical transmitters/receivers, and passive-optical-network transceivers in the United States and Canada. In addition, NEC subsidiary NEC USA Inc. is creating a U.S. Fiber Optics Devices Div. subsidiary company, NEC FiberOptech Inc. (Cupertino, CA), to work collaboratively with Wavesplitter and provide additional engineering support to the North American market.

Centerpoint Broadband Technologies Inc. (San Jose, CA) has deployed and integrated its Celerity CP 3200 (formerly the Zaffire Z3000) DWDM equipment to carry high-speed data traffic between FLAG Telecom's New York, London, and Paris points of presence as part of its city-to-city transoceanic network, FLAG Atlantic-1 (FA-1). The Celerity CP 3200 extends FLAG Telecom's 10-Gbit/sec DWDM networks and services to these metro areas, bringing IP wavelength and other services closer to end customers.

US Signal (Grand Rapids, MI) has selected Cisco Systems Inc. (San Jose, CA) as its exclusive provider of optical-networking equipment to light its established 2,500-mi dark fiber network. US Signal will deploy Cisco's ONS 15454 Metro Optical Transport Platform, ONS 15327 Metro Edge Optical Transport Platform, ONS 15216 Metro DWDM line, and Cisco Transport Manager.

Looking Glass Networks (Oak Brook, IL) has selected DWDM equipment from Sorrento Networks (San Diego) for deployment in its Washington, DC, fiber-optic network. Looking Glass has purchased Sorrento's GigaMux DWDM optical transport platform, EPC family of subrate access multiplexers, and TeraManager network-management system.

Marconi plc (Pittsburgh) has signed a five-year, $80-million networking supply agreement with Grande Communications, a Texas-based broadband service provider. Marconi's DISC*S and Deep Fiber HFC systems will bring optical-fiber connectivity to within 750 ft of most of Grande's customers, allowing the convenience of buying faster Internet, telephone, and cable television services from a single provider.

ADC Telecommunications Inc. (Minneapolis) has entered into a supplier agreement with BellSouth Corp. (Atlanta) in which ADC will provide BellSouth with an array of products ranging from digital signal crossconnects, optical crossconnects, and FiberGuide fiber cabling systems. The products are approved for use throughout BellSouth's nine-state southeastern U.S. territory. The agreement also calls for the consideration of ADC systems integration services in deploying the products and systems.

Automation Tooling Systems Inc. (ATS-Ontario) and EXFO Electro-Optical Engineering Inc. (Quebec City) have reached a strategic alliance agreement to integrate EXFO's automated manufacturing subsystems and test systems into ATS's turnkey custom and standard automation offerings to better meet the needs of optical-component and systems manufacturers. Per the agreement, ATS and EXFO will jointly generate business leads, establish training programs for end users, share marketing strategies and forecasts, and validate product development initiatives.

Metropolitan optical-network provider Telseon (Denver) has launched the nationwide Telseon Channel Program to better enable its customers to navigate the metro on the Telseon network and bundle value-added services. The program includes four phases: business integration, sales training and education, marketing and sales, and service and support.

Math Associates Inc. (Hicksville, NY) has changed its name to Liteway Inc. The company will continue to manufacture and sell fiber-optic transmission systems designed to convey baseband video, audio, RS-232/-422/-485 data, IRIG time codes, and similar signals over distances of up to 40 mi or more. The company's new Website can be found at

Fujitsu Network Communications Inc. (Richardson, TX) has launched a product renaming initiative designed to simplify customer inventory management and product identification and better position the products in the future. Fujitsu's range of optical-networking systems will all carry the FLASHWAVE brand name.

Trimac Networks (North Brunswick, NJ) has announced its intention to develop and market integrated 10- and 40-Gbit/sec transceivers with up to 10 components in a single module. Incorporated in August 2001, Trimac expects to begin launching products within six to 12 months and is currently conducting a first round of funding.

Optical Ethernet startup Internet Photonics Inc. (Shrewsbury, NJ, and Marlborough, MA) has received $31 million in first-round funding, led by the Sprout Group. The company's founding team hails from Bell Labs, which supplied equipment, technology, designs, and intellectual property to help launch the company.

XO Communications Inc.'s (Reston, VA) board of directors has approved a preliminary agreement with Forstmann Little and Télefonos de México S.A. de C.V., pursuant to which XO will receive an investment of $400 million from each company in exchange for new equity in the company. Proceeds of the investment will be used to fund the continued development of XO's broadband telecommunications networks and ongoing business operations and to complete the balance sheet restructuring.

RateXchange Corp. (San Francisco) has completed a $3.25-million private placement financing, representing a 30% oversubscription from the original $2.5 million sought. Participants included institutional investors Morgens Waterfall Vintiadis and Renaissance Capital Group Inc., in addition to a small group of high net worth investors, including officers and directors of the company. The funds will be used to support the company's operating plan to provide brokerage, consulting, and information services in bandwidth and other related products and supply additional working capital.

kSARIA Corp. (Wilmington, MA) has raised $20 million in second-round venture funding, led by a new investor, Advent International of Boston, which was joined by all of kSARIA's first-round institutional investors: North Bridge Venture Partners, U.S. Venture Partners, Boulder Ventures Ltd., and Spinner Asset Management, LLC. kSARIA will use its fresh influx of capital to fully develop its family of products and expand its sales and manufacturing infrastructure.

Optical-component startup Sabeus Photonics Inc. (Chatsworth, CA) has received an additional $16 million in financing, led by TL Ventures with additional funding from Digital Coast Ventures, CSFB Ventures, and first-round funding leader Redpoint Ventures. The company plans to use the funds to develop additional optical components and expand its manufacturing facilities.

Everest Broadband Networks (Fort Lee, NJ) has completed its fourth round of financing with existing investors Pequot Capital Management and Exelon Capital Partners, bringing its total capitalization to $88 million. Everest provides high-speed Internet access, local and long-distance voice, Web hosting, audio conferencing, and other applications to more than 1,000 commercial customers nationwide.

Yipes Communications Inc. (San Francisco) is currently delivering scalable Ethernet services to Wolverine Trading LP's offices in Chicago and San Francisco, with plans to add locations in New York and Philadelphia. The equity trading firm is also using Yipes for high-speed Internet service and connectivity to its London office over a virtual private network.

Level 3 Communications Inc. (Broomfield, CO) has become the primary provider of broadband services for Sony Pictures Digitial Entertainment's (SPDE) Screenblast, an entertainment offering aimed at consumers with broadband Internet connections. SPDE has purchased multiple Level 3 services, including Center Collocation and CrossRoads Internet access.

Michigan-based Internet provider Merit Networks has selected Alidian Networks' (San Jose, CA) OSN 4200 systems to upgrade its backbone transport network. The OSN 4200s will be configured as single-wavelength systems, each providing 2.5 Gbits/sec of service-bearing capacity now and 10 Gbits/sec in the future using Alidian's integrated DWDM capability.

Metromedia Fiber Network Inc. (MFN-New York) will provide metropolitan fiber to RealNetworks Inc., supporting the company's and Websites. Per the multiyear agreement, MFN will lease unshared, unmetered bandwidth to RealNetworks to support its current and future capacity needs.

Integrated communications provider Choice One Communications (Rochester, NY) has activated its intracity fiber ring in Buffalo, NY, recently acquired from FiberTech Networks (Rochester). The Buffalo ring is the third to be activated through Choice One's partnership with FiberTech Networks.

The Telecommunications Industry Association (TIA-Arlington, VA) has published a new standard, "FOCIS-5-Fiber Optic Connector Intermateability Standard-Type MPO," TIA/EIA-604-5-A. The document is a revision of TIA/EIA-604-5. FOCIS-5 presents the intermateability standard for connectors with the commercial designation of MPO and is used as an addendum to TIA/EIA-604, "Fiber Optic Connector Intermateability Standard."


Colibrys SA (Neuchâtel, Switzerland) and Coventor Inc. (Cary, NC) have entered into joint development and preferred manufacturing partnership agreements for the development of micro-electromechanical systems (MEMS). The first demonstrations of their common design and process technology platform will be steerable mirror arrays and optical shutters, scheduled for the first quarter of 2002. In addition, Colibrys SA also announced the selection of CoventorWare as its software of choice for MEMS and micro-optical-electromechanical systems.

Optical interconnect company Schott Optovance Inc. (Southbridge, MA) has partnered with VCSEL developer ULM Photonics (Ulm, Germany) to drive the deployment of high-density VCSEL arrays. Schott Optovance is the lead investor of ULM Photonics and is now its exclusive North American distributor.

GigaTera Inc. (Zurich), developer of components for next-generation optical networks, has received an investment of $2 million in venture financing from Cypress Semiconductor and its wholly owned subsidiary, Silicon Light Machines, both based in Sunnyvale, CA.

Maple Optical Systems (San Jose, CA) has opened a software design facility in Nottingham, UK, that expands the company's European operations. The facility will develop SDH software that enables European carriers to integrate Maple's networking systems into their telecommunications infrastructure. Maple anticipates it will deliver its first generation of products into the North American and European markets simultaneously in the summer of 2002.

Alcatel (Paris) has successfully completed third-party multivendor interoperability testing of MPLS on the Alcatel 7670 Routing Switch Platform and the Alcatel 7411 Broadband Access Server. The multiprotocol platform demonstrated interconnection with core IP routers using its STM-16/OC-48 packet-over-SONET interface. The European Advanced Networking Test Center, an independent equipment test facility, conducted the test.

Acesa Telecom will deploy nearly 8,000 fiber-km of Corning Inc.'s (Corning, NY) LEAF optical fiber for its 250-km Iberian network overbuild, extending from Zaragoza to the Mediterranean Coast. The project is scheduled to begin in 2002 and, when completed, will connect the entire northeast region of Spain from Catalunya to Aragon and link Acesa's existing fiber-optic network across Catalunya. Corning Cable Systems is the exclusive cable and hardware supplier for this project.

Optoelectronics company Intense Photonics (High Blantyre, UK) has announced a strategic partnership with III-V wafer specialist IQE (Cardiff, UK). The partnership involves the design, modeling, and growth of complex, compound semiconductor crystal structures. IQE will be providing gallium arsenide- and indium phosphide-based epitaxy structures to support Intense Photonics' work in component sectors, including pump lasers and photonic switches for the C- and L-bands.

Song Networks Holding AB (Stockholm) will purchase the international fiber network from the bankruptcy estate of Enitel of Norway. The network has a current capacity of 20 Gbits/sec but can be increased to 160 Gbits/sec using existing equipment. Song Networks will now be able to link its Nordic fiber network with the U.K., Netherlands, and Germany.

Network-management software provider OPNET Technologies Inc. (Bethesda, MD) has fully acquired WDM NetDesign B.V.B.A., a Ghent, Belgium-based software company with expertise in optical-network design. The new entity, OPNET Technologies B.V.B.A. will focus on further development and sales of OPNET's WDM Guru product as well as the continued research and development of optical-network design algorithms to be used in OPNET products like Netbiz and SP Guru.

Alcatel (Paris) has demonstrated transmission of 125 WDM data channels at a rate of 40 Gbits/sec-representing a total capacity of 5 Tbits/sec-over 1,500 km of fiber. Transmission was achieved using Alcatel's dual-stage hybrid erbium/ Raman amplifiers, 40-Gbit/sec WDM systems, forward error correction technology, and TeraLight Ultra optical fiber specially optimized for high-speed, long-haul, and ultra-long-haul transmission.

Fiber-optic component manufacturer Richco Inc. (Chicago) has signed a licensing agreement with Miniflex Ltd. (Suffolk, UK) that gives Richco exclusivity to manufacture and sell optical fiber bend-limiting tubing, a patented tubing that prevents fiber from being crushed or bent.

East Asia

LaserComm (Plano, TX) completed system-level optical transmission testing of its broadband Hi-Mode Dispersion Management Device (DMD) at China's Wuhan Research Institute of Posts and Telecommunications (WRI). WRI reports that in all tests, the product yielded outstanding results-precisely reversing the negative effects of chromatic dispersion. Tests measured signal quality after transmitting at 10 Gbits/sec on all channels of its long-haul DWDM system through 400 km of non-zero dispersion-shifted fiber.

Appian Communications Inc. (Acton, MA) has received a multimillion-dollar order for its Optical Services Activation Platform and Appian Vista Services and Element Manager from NTT Communications (Tokyo). The systems will be used to enhance the network of the IP Services Dept., Corporate Users Business Div. of NTT Communications, which is responsible for providing enhanced services to Japan's commercial users and secondary providers.

Alcatel (Paris) has been awarded a $110-million contract from Chunghwa Telecom (CHT), Taiwan's incumbent telecommunications operator, to provide CHT with a nationwide network based on SDH equipment. The contract marks the first time a Taiwanese service provider will deploy 10-Gbit/sec equipment.

Global telecommunications group Cable and Wireless plc (Vienna, VA) has agreed, through its subsidiary, Cable & Wireless IDC, to acquire Tokyo-based PSINet Japan Inc. The companies have signed a share purchase agreement to acquire the entire issued share capital of PSINet Japan for approximately £7.2 million.

Furukawa Electric Co. Ltd. (Tokyo) has been issued a U.S. patent covering a new technique developed by the company to improve the use of Raman amplifiers for WDM transmission systems. The technique is called Wavelength Division Multiplexed Pumping, in which multiple wavelengths are simultaneously used to achieve the desirable shape of Raman gain spectrum for WDM transmissions.

NTT Communications (Tokyo) has successfully turned up commercial services on its nationwide network using Sycamore Networks' (Chelmsford, MA) SN 3000 and SN 16000 intelligent optical switches. The NTT network is Japan's first nationwide all-switched optical network.

PowerComm Corp., a subsidiary of KEPCO, Korea's National Electric Power Corp., will deploy over 1,000 advanced service-creation routers from Riverstone Networks Inc. (Santa Clara, CA). PowerComm will deploy interlinked RS 38000 aggregation routers in its metro core and RS 1000 and RS 3000 access routers in its metro edge, which will reach every district throughout greater Seoul, a population of 11 million.

BSES Telecom, a subsidiary of power and transmission company BSES Ltd. (New Delhi) has selected Juniper Networks Inc.'s (Sunnyvale, CA) M160 and M20 Internet routers for its MAN in Mumbai, India. Juniper will supply routers and points-of-presence in BSES Telecom's 384 sq-km MAN in five suburbs, including Bandra, Santacruz, Juhu, Andheri, and Kandivali.

Africa · Middle East · Australia

Lightscape Networks (Petah Tikva, Israel, and Herndon, VA) has won a global contract to supply the XDM flagship optical-networking platform and a full suite of professional support services to Sweden's Telia International Carrier. The project will provide optical connectivity and lambda services between Telia's Viking backbone network and the MANs of numerous major cities across North America, Europe, and later Eastern Europe. The initial phase of the contract, covering approximately 15 cities, is valued at over $20 million.

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