Calix Networks Inc. today announced its first acquisition, as the company said it is buying fiber access gear maker Optical Solutions Inc. (OSI) for an undisclosed sum. (See Calix Buys Op Solutions.)

The deal gives Calix an entry into the GPON (gigabit passive optical network) market -- and a stronger position in fiber access overall -- while giving OSI a graceful exit as a standalone company that had raised more than $122 million by May 2002, but hadn't announced any new funding since September 2003.

Calix CEO Carl Russo told Light Reading today that the transaction is an acquisition, and Calix will be the brand going forward. But he also said that the combined company, though based in Petaluma, Calif., would make an effort to keep the talent that Minneapolis-based OSI has amassed over the years. The combined company will employ around 300 people.

To date, Calix says it has shipped more than 1.2 million DSL, Ethernet, and other ports on more than 6,500 C7 platforms. The company says it has 190 service provider customers in North America. But it has only just begun taking on the fiber access market, and it hasn't made much noise about GPON.

"The Calix C7 was built from the start with ample bandwith to handle GPON," said Kevin Walsh, Calix's VP of marketing, in an October conversation with Light Reading. "But ADSL 2+ and BPON are both viable for our customers today."

Even with newish BPON (broadband PON) capabilities and no shipping GPON product, the Calix's C7 has made a big splash in the Tier 2 and Tier 3 multiservice access space. "Most of the C7's innovation is in the merging of the NGDLC (next generation digital loop carrier) and the extensive transport capability," according to the latest Heavy Reading report on multiservice access platforms. (See HR: FCC Spurs MSAP.)

Calix, after winning a key deal with Sprint Corp. (NYSE: FON), had started to develop some GPON capabilities and had even approached OSI to do a joint development deal because it found the development process tough -- and the customer demand heavy. (See Nortel, Calix Get Access at Sprint.) "While everybody talks about fiber to the prem as just a commodity sort of thing, it's actually not trivial," says Russo. "And when you go and talk to customers about what they deploy, they'll tell you OSI and the reason is because it works."

OSI began shipping its central office GPON device -- the FiberPath 590 OLT+ -- in June. But the company has been concentrating on fiber access since it was founded in 1994, quite a bit longer than most players in the space today. (See Optical Solutions Ships GPON Platform.)

And, while fiber access networks are just catching on in a lot of places, OSI says it already has more than 140 customers serving "close to" 100,000 FTTP subscribers, an average of just a little more than 700 FTTP customers per network served.

Combined Calix and OSI say they'll have more than 70 IPTV deployments working right now -- though not all are live with customers -- and more than 300 total service provider customers, about 175 of which are doing fiber access deployments. Amazingly, the two companies only have about 17 overlapping customers, one of which is Sprint, Russo says.

Russo says Calix will continue to support OSI's products and there will be joint development for the C7 as well, including a GPON blade that will ship sometime in mid 2006.

Finally, though a major GPON-related carrier RFP is slated to drop this week from the nation's three largest phone companies, Russo says that's not what is causing Calix and OSI to combine -- but he does note that Calix will be "better positioned because of it."

— Phil Harvey, News Editor, Light Reading