WDM-PON Update

1:20 PM -- Considering the circumstances, you have to admire the constituent parts of Nortel Networks Ltd. for their persistent optimism. (See Nortel: We're Winning New Biz in APAC, Nortel Claims 40G Lead, and Richard Lowe, President of Carrier Networks, Nortel, for examples.)

Among those units swimming valiantly against the tide is LG-Ericsson Co. Ltd. , the joint venture (also up for sale) that, apart from pushing hard to keep its Korean business going, is the most prominent flag-bearer for next-generation fiber access technology WDM-PON. And this week, LG-Nortel announced a WDM-PON deal in Norway. (See LG-Nortel Wins Norway PON Deal and Nortel Offers Up Its LG-Nortel Stake.)

WDM-PON, which can deliver a dedicated wavelength to each end point (a single user, business, building -- you get the picture), is regarded by many as the broadband access technology of the future, and there are plenty of big names checking it out. (See FT Lauds WDM-PON's Potential, Ericsson Joins Cost-Cutting WDM-PON Team, Tellabs Lays Out WDM-PON Plan, and ADVA Unleashes WDM-PON.)

And LG-Nortel has been pushing ahead, winning a number of small engagements in Europe and North America since it acquired its way into the market. (See LG-Nortel Touts WDM-PON, Hancock Uses WDM-PON, Dutch Do WDM-PON, and Nortel JV Buys WDM-PON Specialist.)

Unfortunately for LG-Nortel, small deployments are set to be the norm for a few years yet, as the general consensus is that it will be anything between two and five years before the component prices and maturity of the technology reach a point where mass-market business might be a possibility. There's also the considerable marketing clout of the GPON vendors to consider: Alcatel-Lucent (NYSE: ALU), for example, is playing with WDM-PON in its labs but doesn't plan to bring its developments out into the open for years.

But from tiny acorns... LG-Nortel is gaining invaluable field experience with its multiple, small WDM-PON successes. Could that be enough to tempt a buyer to splash some cash on Nortel's majority (50 percent-plus-one-share) stake in the joint venture?

The prospect of a field trip to Norway, surely, is temptation enough...

— Ray Le Maistre, International News Editor, Light Reading