Zhone Sheds Old Nortel, Sorrento Gear

In an effort to focus on its access portfolio, Zhone Technologies Inc. (Nasdaq: ZHNE) announced today that it sold off its AccessNode and GigaMux assets, stuff it had acquired from Nortel Networks and Sorrento Networks, respectively, years ago. (See Zhone Divests Two.)

The divestitures position the company as a pure-play access vendor with a focus on technologies like Ethernet in the First Mile (EFM) and Gigabit passive optical networking (GPON).

Zhone sold its GigaMux line of metro WDM (wavelength division multiplexing) gear to newly formed Sorrento Networks in a deal that was completed last week.

As a result of that deal, Sorrento will be responsible for sales and service of the GigaMux 6400 DWDM Optical Transport Solution, GigaMux 1600/3200 CWDM/DWDM Optical Transport Solution, and the GigaMux 50 Compact, Point-to-Point CWDM Optical Transport Solution. (See Sorrento Finds Life After Zhone.)

Zhone also announced the sale of its AccessNode product portfolio to Communications Test Design Inc. (CTDI) CTDI is already the service and repair contractor for the AccessNode suite, which includes the AccessNode, AccessNode Express, and the Universal Edge 9000 (UE9000) products.

Zhone has a long-standing relationship with CTDI, which has purchased non-core assets from Zhone in the past. The company most recently acquired Zhone's eLuminant line of products in September 2005.

While the company is selling off the GigaMux and AccessNode assets, that doesn't mean those acquisitions were total flops, says Zhone CTO Eric Presworsky.

"The acquisitions in the past have increased our customer base, led to some cross-selling, and also gave us some great technologies that we've incorporated into our pure access platforms," Presworsky says.

One example of this, Presworsky notes, is the addition of WDM technology into the company's FiberSLAM access platform. (See Zhone Flaunts FiberSLAM and Zhone Intros FiberSLAM.)

But Zhone believes that it's better served by being a pure-play access vendor. "Now it's time to focus our company's resources on our pure access platforms," Presworsky says.

Heavy Reading analyst Sterling Perrin says it makes sense for Zhone to divest some assets. "I think they realized they had too many irons in the fire and this was too far from their core product lines," he says.

— Ryan Lawler, Reporter, Light Reading

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