Nortel Scores Comcast Coup

Picks up the DWDM portion of the project, while Cisco settles for the routing piece

March 2, 2005

2 Min Read
Nortel Scores Comcast Coup

Nortel Networks Ltd. (NYSE/Toronto: NT) has scored a DWDM win with the recently announced Comcast Corp. (Nasdaq: CMCSA, CMCSK) backbone buildout, outdueling Cisco's optical division, Light Reading has learned.

Cisco Systems Inc. (Nasdaq: CSCO) had bid for the entire backbone but wound up with only the router portion of the project, losing out to Nortel on the DWDM side, according to one source with direct knowledge of the deal.

Analysts had already pegged Cisco and Nortel as the likely winners, beating out Alcatel (NYSE: ALA; Paris: CGEP:PA), Ciena Corp. (Nasdaq: CIEN), and Lucent Technologies Inc. (NYSE: LU), among others (see Comcast Details $100M Upgrade and Cisco, Nortel Vie for Comcast Deal).

Cisco and Nortel officials declined comment, both saying they don't comment on rumors. Officials at Comcast did not return a call requesting comment.

Announced in January, Comcast's new backbone is being built on dark fiber provided by Level 3 Communications Inc. (Nasdaq: LVLT). The project is worth an estimated $100 million including equipment costs, by Comcast's estimate.

At the time, analysts noted that the size of the deal wasn't that big to Cisco or Nortel. But the project could provide a technology showcase for Nortel, as the source says Comcast wants to send signals as far as 120km, skipping some of the amplifier huts that sit 60km to 80km apart.

Perhaps more important is the moral victory over Cisco, which considers itself an up-and-comer in DWDM. Officials there reckon they've ascended to No. 2 in the market behind Nortel, having recently surpassed ADVA Optical Networking (Frankfurt: ADV).

Cisco's climb is particularly noteworthy considering the company got a late start compared to Nortel. "For us, everything is greenfield. A lot of Nortel's business is add-ons," said Rajiv Ramaswami, VP of Cisco's optical networking group, in an interview earlier this month.

One possible key to the win was Nortel's Common Photonic Layer, an initiative launched last summer. It represents a more modular DWDM portfolio, where optics and amplifiers can be swapped between metro and long-haul applications (see Nortel Intros DWDM Platform).

Cisco is likewise working to make DWDM more modular, as Ramaswami noted the company is developing pluggable optics usable on both routers and DWDM equipment. For example, Cisco has been shipping a 1-Gbit/s DWDM interface in a gigabit interface converter (GBIC) format for about a year, he said.

— Craig Matsumoto, Senior Editor, Light Reading

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