May 9, 2003
Lantern Communications Inc. is searching for money and may have put itself on the selling block, sources say.
Lantern, which builds systems for Resilient Packet Ring Technology (RPR,), reportedly has already offered itself to NEC Corp. (Nasdaq: NIPNY) and been turned down.
More generally, rumors of a Lantern sale have circulated for several weeks. One source says Ciena Corp. (Nasdaq: CIEN) even made an offer. Ciena's policy is not to comment on such issues, according to a spokesman.
Lantern officials also declined comment. "All of our relationships are confidential," says CEO Doug "Discreet" Jacobs. NEC officials couldn't be reached immediately.
Competitors have long questioned Lantern's chances, with some suggesting that a shutdown is imminent. "That's certainly not true," says Nader Vijeh, Lantern's CTO. "We had a slight headcount reduction, but that's about it. We have about 30 people right now."
Jacobs admits the company is looking for money "like everybody else." Lantern raised more than $74 million in two rounds in 2000, and investors ponied up $10 million more with Jacobs's appointment in October (see Lantern Changes Its Bulb and Lantern Names CEO).
The money is enough to keep Lantern alight, Jacobs says. "We've got revenue coming in. We've been very prudent with the way we've handled our cash. We think one way or another, we'll keep going until the market gets up."
Lantern hasn't announced any customers, but one source says the NEC SpectralWave MMSP 1000 and 2000 systems are Lantern's designs, licensed to NEC in an OEM deal -- making NEC a logical candidate if Lantern is searching for buyers. (This particular source hadn't heard about the rumored acquisition talks.) NEC touts the MMSPs as RPR-capable boxes for 10-Gbit/s metro rings. If they're Lantern's systems, they would presumably use the 10-Gbit/s modules that recently reached general availability (see Lantern Rolls Out RPR Gear).
Jacobs wouldn't comment on whether Lantern and NEC have an OEM deal.
The RPR market has begun showing signs of life -- AT&T Corp. (NYSE: T) showed strong interest last winter, and Fibernet Group plc (London: FIB) announced this week that it's using RPR ito offer Ethernet services in its U.K. network. On the equipment side, Siemens AG (NYSE: SI; Frankfurt: SIE) is joining the fray. (See Who Knew? Big Carriers Like RPR, Fibernet Enhances Ethernet Services and Siemens Is Shaping Up).
Fibernet's example aside, much of the current interest seems to be in RPR's interplay with Sonet, as opposed to the Ethernet-based implementations many had envisioned early on (see RPR’s New Guise: The Packet ADM).
Lantern still has faith in both the Sonet and Ethernet markets. "We think the metro Ethernet market is vibrant" and that Sonet and Ethernet will both be big, Jacobs says. "All indications are that Ethernet will become the market standard. The global market's moving in that direction."
— Craig Matsumoto, Senior Editor, Light Reading
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