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ADVA Holds Its Own

ADVA's reseller strategy appears to be working, as it announces three customers this week

October 31, 2002

2 Min Read
ADVA Holds Its Own

With three customer announcements this week, ADVA AG Optical Networking (Frankfurt: ADV) appears to be writing a survival handbook for midsized companies that are trying to take on equipment giants such as Nortel Networks Corp. (NYSE/Toronto: NT). Chapter One: Partner with a large Nortel competitor. Chapter Two: Let the big guys duke it out.

ADVA announced two new European customers for its Fiber Service Platform (FSP) 3000 product on Thursday. Both new deals were done through ADVA's reseller arrangement with Siemens Information and Communications Networks Inc. (ICN): ADVA's technology is rebranded and sold as the Siemens TransXpress Waveline MetroNet.

The ADVA FSP 3000 is a DWDM transport box that provides 32 protected channels of bandwidth and has a total capacity of 640 Gbit/s.

The first new customer ADVA announced is Telecom Italia SpA (NYSE: TI), which has deployed an eight-node ring in Rome. The carrier will deploy more rings in other Italian cities later this year, according to Brian McCann, ADVA's chief marketing and strategy officer.

The other customer is Cyprus Telecommunication Authority (CYTA), which has given Siemens ICN a three-year contract for the deployment of a metro optical backbone network throughout Cyprus.

No financial information was disclosed.

The company also says it has deployed more than 30,000 WDM channel cards to date, about a third of those coming in the past 12 months. Enterprise storage networking is one reason for the surge in deployments, McCann says.

"The enterprise customer will deploy dozens to hundreds of channels between locations for large storage applications. That's been the bread-and-butter of our enterprise sales, which is 50 percent of our [overall] business."

Earlier this week, ADVA announced Fusion Communications Corp. has started deploying its FSP 2000 gear, via the company's OEM partner, Hitachi Ltd. (NYSE: HIT; Paris: PHA).

The company says this week's announcements don't change its guidance for its third-quarter earnings report, to be announced next Tuesday. Analysts expect ADVA to report revenues of $20 million to $22 million.

"Our sales have been stable from quarter to quarter, and it's been a bloodbath for everyone else," McCann says. "We're the number two vendor worldwide, second only to Nortel."

Stable revenues are noteworthy, given that the metro DWDM market shrank 35 percent since the fourth quarter of 2001 -- from $165.5 million to $108.4 million, according to research from Dell'Oro Group.

ADVA says it has more than 60 customers worldwide and it employs more than 400 people.

— Phil Harvey, Senior Editor, Light Reading

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