Chorum Seals Deal With Nortel

Chorum, which has registered for an IPO, will supply Nortel with its Optical Slicer product for the next few years

February 23, 2001

2 Min Read
Chorum Seals Deal With Nortel

RICHARDSON, Texas -- On Monday, Chorum Technologies Inc. will announce that it has signed an agreement to supply Nortel Networks Corp. (NYSE/Toronto: NT) with its PolarWave Optical Slicer filters. Nortel won’t let Chorum say what the details of the deal are -- only that it’s a multiyear agreement worth millions of dollars.

Nortel uses Chorum’s filters in its Optera long-haul DWDM systems. The Optical Slicer, a passive device, combines several thousand channels onto a single fiber strand (see Chorum to Ship New DWDM Gizmos). Once those wavelengths have traversed the network, slicers on the other end separate those channels back off the fiber strand. The upshot is the network can carry more bandwidth.

Chorum’s agreement with Nortel reflects what’s been happening between the two companies since early last year. Chorum, which is in registration for an IPO, recognized revenues of $6.1 million for the three months ending December 31, 2000, and all of that revenue came from its shipments of Optical Slicer filters to Nortel Networks, according to the most recent filing with the Securities and Exchange Commission. In the prior quarter, Chorum recognized $3 million in revenues from the same business.

"Recognized” is the key word here. Chorum is shipping Slicers to (and getting paid by) at least three customers right now, according to CEO Scott Grout. But the company is conservative about how and when it accounts for revenues. It tends to wait about three months, according to Grout.

So who are Chorum’s other customers? Grout’s lips are sealed for now, but we do know that Chorum has shipped products to Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Corvis Corp. (Nasdaq: CORV), Fujitsu Network Communications Inc., Lucent Technologies Inc. (NYSE: LU), Marconi Communications PLC (Nasdaq/London: MONI), Cisco Systems Inc. (Nasdaq: CSCO), Sycamore Networks Inc. (Nasdaq: SCMR), and TyCom Ltd. (NYSE: TCM; BSX: TCM), according to public filings.

Chorum's competitors include Corning Inc. (NYSE: GLW), Avanex Corp. (Nasdaq: AVNX), and JDS Uniphase Inc. (Nasdaq: JDSU; Toronto: JDU).

For his part, Grout remains bullish about the long-haul space, despite Nortel’s recent trouble with the economic slowdown: "What happened to companies in the most recent quarter is not meaningful relative to all the bandwidth that’s going to be deployed in the next several years."

-- Phil Harvey, senior editor, Light Reading

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