Cisco Hones RBOC Pitch

Cisco's DWDM enhancements and OSMINE certification point to growing effort to land RBOC/ILEC deals

July 10, 2001

3 Min Read
Cisco Hones RBOC Pitch

BALTIMORE -- NFOEC -- Cisco Systems Inc. (Nasdaq: CSCO) on Monday made a series of announcements reflecting a drive into the core of telecom networks and the desire to boost sales to RBOCs (regional Bell operating companies) and ILECs (incumbent local exchange carriers), the telecom companies that control most of the capital spending in the market for equipment.

The company announced it has added capacity to its long-haul dense wavelength-division multiplexing (DWDM) product and completed a series of software interoperability tests for its next-generation Sonet add/drop multiplexer (ADM), in addition to adding numerous features to its optical networking product line.

The company also announced that its leading Sonet product, the ONS 15454, has completed OSMINE (Operations Systems Modification of Intelligent Network Elements) certification, which means it works with operating systems from Telcordia Technologies Inc., the firm that makes 80 percent of the operating systems used by RBOCs. Sales to RBOCs take several months and, as telecom equipment firms go, Cisco is relatively new in expanding from the enterprise data networking market to the optical networking market.

All of these moves point to Cisco beefing up its products for RBOC and ILEC networks, where spending is more stable (though still falling) than the beaten-down CLEC (competitive local exchange carrier) market that Cisco fomerly targeted. Company officials also pointed out that even though it is no longer marketing an optical switch, it is still interested in products targeting core telecom networks.

"We left the core switching business, but we haven't left the core," says Carl Russo, vice president of Cisco's Optical Network Group, referring to the Cisco's cancellation of its Wavelength Router product line.

Russo says that there's no reason for Cisco to leave the core DWDM market, because it's still growing.

He says the networks that have the most traffic demand in long-haul networks are those that are either less than 600 kilometers or those in the 1500km to 2000km range. "We have the ONS 15800, and you can probably tell where we're going from there."

Cisco does have two advantages in its race to land some RBOC and ILEC customers. First, it is the market leader in next-generation Sonet add/drop multiplexers (ONS 15454), with more than 600 customers to date. "If we don't execute, our competitors will run all over us," says Russo.

Second, Cisco has accepted that the service-provider market, unlike the enterprise data-networking equipment space, is not a place for instant gratification. "The mood inside of Cisco is that we've taken a good understanding that selling to ILECs is a long process," Russo says.

To this end, the company continues to upgrade capacity and features on its DWDM products, where its progress hasn't been as successful as in the metro Sonet market. Cisco added out-of-band forward error correction (FEC) and L-Band transmission capabilities to its long-haul DWDM box, the ONS 15800. These technologies, respectively, help fix corrupted bits of data in a stream and increase the channel count. The company has also added 32 channels of DWDM to its Sonet product.

The ONS 15800 can now handle 64 OC192 (10 Gbit/s) channels per fiber and is best used for transporting data over networks where regeneration stations (and the cities served) are less than 600km apart, says Jim Sauer, director of product marketing for Cisco's Photonics Business Unit.

Cisco acquired the ONS 15800 product from Pirelli in 1999. The product now has 25 customers, including a few companies whose networks Cisco has helped finance, such as Cambrian Communications LLC, Velocita Corp., and Cogent Communications Inc. The ONS 15800 customer set also includes France Telecom SA; Infostrata, the Italian CLEC; and Global Crossing Ltd. (NYSE: GX), which were Pirelli customers before Cisco acquired its technology. Cisco has been shipping OC192 capabilities with the box since 1998 and now has more than 3,000 OC192 transponders in service around the world, says Sauer.

- Phil Harvey, Senior Editor, Light Reading

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