April 27, 2001
LuxN Inc. is hoping to make a big splash on Monday with a double announcement – a big new customer, and a new blade for its equipment that could slash the cost of deploying wavelength-division multiplexing in access networks.
The big new customer is Time Warner Telecom Inc. (Nasdaq: TWTC), which has already begun deploying LuxN’s products in New York City for fiber relief applications and in Columbus, Ohio, to provide gigabit Ethernet services.
While the press release only gives vague details of the deal, LuxN told Light Reading that the contract spans five years and calls for Time Warner to buy approximately $5 million to $10 million worth of gear per year. But because some of the equipment will be used to provide gigabit Ethernet services and will only be deployed as customers demand the service, it is hard for LuxN to have too much visibility into how much they will actually sell, says Agnes Imregh, vice president of marketing for LuxN.
“It’s impossible to predict a specific dollar amount,” she says. “But judging from Time Warner’s initial deployments in Manhattan and Columbus, we feel confident about the potential upside.”
Regardless, winning Time Warner is a big deal, since many of LuxN's customers are either large enterprises or small carriers servicing campus areas. This is the first big-name service provider the company has announced since its deal with Metromedia Fiber Network Inc. (MFN) (Nasdaq: MFNX) (see MFN to Deploy LuxN Platform).
“This is really a good move for them,” says Alan Bezoza, a broadband access analyst with CIBC World Markets. “Time Warner is one of the largest CLECs out there, and they have a lot of resources. This gives LuxN some validation for their product.”
Along with the new customer, LuxN also announced a new product called the WideWav, which provides coarse wavelength-division multiplexing (CWDM). Because CWDM uses low-cost, uncooled lasers and wide-band multiplexers and demultiplexers instead of the more expensive cooled lasers found in standard WDM systems, it provides a much more affordable solution. How low-cost is it? Imregh says that the CWDM product will cost about $3500 per wavelength. That’s half the price of its regular product, which typically sells for $7500 per wavelength.
”Our biggest competition is the economy,” says Imregh. “Providers can always choose not to deploy anything. So we need to have the lowest-cost solutions to make them attractive and affordable.”
Traditional CWDM only scales to about eight wavelengths, but LuxN has figured out a way to combine CWDM with its regular DWDM (dense WDM) blades that allows the system to scale up to 20 wavelengths.
“I haven’t seen a lot of need for 32 channels in the access network,” says Scott Clavenna, president of PointEast Research LLC and director of research for Light Reading. “So it makes a lot of sense to provide a cheap way for providers to use WDM. It sounds like a pretty good deal.”
But LuxN will most likely not be alone in integrating the cheaper CWDM with the more wavelength-efficient and expensive DWDM. ONI Systems Inc. (Nasdaq: ONIS) will likely move in this direction as well, using parts of the Opticity product line it bought from Finisar Corp. (Nasdaq: FNSR), says Clavenna. “This doesn’t seem like rocket science,” he says. “It’s a nice idea, and I’m sure others will also do it.”But until others catch up on adding this capability, CIBC's Bezoza says it should give LuxN a leg up on competitors like ONI, Cisco Systems Inc. (Nasdaq: CSCO), Adva AG Optical Networking (Neuer Markt: ADV), and Nortel Networks Corp. (NYSE/Toronto: NT).
“One of the key attributes of any access system is the need for flexibility,” he says. That’s what providers want, and if they can offer that, it’s a key differentiator.”
WideWav will ship in the middle of June and will be demonstrated at the Supercomm 2001 tradeshow in Atlanta in June.
For more information on Supercomm 2001, please visit the Light Reading Supercomm 2001 Preview Site.
-- Marguerite Reardon, Senior Editor, Light Reading http://www.lightreading.com
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