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Tellabs: Alcatel's Silent Partner at Sprint?Tellabs: Alcatel's Silent Partner at Sprint?

Tellabs is sharing a metro DWDM contract award at Sprint with Alcatel. Why's it kept mum?

February 12, 2003

3 Min Read
Tellabs: Alcatel's Silent Partner at Sprint?

Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) has won a metro DWDM contract with Sprint Corp. (NYSE: FON), Light Reading has learned.

In fact, this contract relates to the same RFP Alcatel SA (NYSE: ALA; Paris: CGEP:PA) announced yesterday (see Alcatel Wins Sprint Metro DWDM Deal), say several analysts and sources close to Tellabs.

As Alcatel execs were fielding press calls, Tellabs, Alcatel, and Sprint all chose to stay mum on the news that Tellabs' 7100 Optical Transport System was put alongside Alcatel's 1696 on Sprint's approved menu for metro deployments nationwide.

Sprint spokeswoman Alice O'Brien says the original announcement about Alcatel's win was meant to trumpet the implementation of a network in Las Vegas (see Sprint Picks Alcatel for DWDM). There was a second announcement from Tellabs about metro deployments for Sprint in North Carolina and Florida that was being prepared but hadn't been released at the same time as Alcatel's announcement.

Sprint won't officially say how many vendors -- or which ones -- it has on its metro DWDM roster.

Alcatel spokeswoman Jamie Horton says Alcatel couldn't comment on who else may have been involved in the RFP procedure or final selection. "It's Sprint's territory," she says, and it's up to the carrier to announce its vendors. She says the metro network Alcatel reported building for Sprint in Las Vegas does not involve other vendors.

Tellabs spokeswoman Jean Medina acknowledged the vendor "has made no announcement" but at press time couldn't address the specific questions about why or whether there might be further news. From what Sprint says, however, a press release on Tellabs' Sprint deployments seems to be in the carrier's approval process and should be out shortly.

One analyst says all this may be much ado about very little. "This may not turn out to be a highly meaningful award," says Tom Nolle, president of network consultancy CIMI Corp., who also acknowledges having heard of the joint RFP win at Sprint some time ago. "Sprint may not do very much with this RFP." When Alcatel announced it yesterday, no terms were revealed, and it seems unlikely that any will be given for Tellabs. The award seems to be more in the nature of a standing approval "in case" Sprint should need some metro DWDM gear.

Nolle thinks upcoming Federal Communications Commission (FCC) rulings that could free up RBOCs might make any large-scale involvement by an IXC in the metro space questionable. "Right now, any IXC metro investment is a horrible risk. There's just no other way to say it," Nolle maintains.

Still, the Sprint win might serve Tellabs well in other areas. It seems to have been common knowledge in some quarters that as a result of the joint Sprint win with Alcatel, Tellabs might be looking forward to even more significant awards.

Back in November 2002, Communications Industry Researchers Inc. reported in a research note that Tellabs not only won Sprint's metro DWDM RFP along with Alcatel, but that the award was likely to open the way for Tellabs to make inroads at Verizon Communications Inc. (NYSE: VZ).

According to CIR's Mark Lutkowitz, VP of optical networking research, and Sam Greenholtz, senior analyst, Verizon's been eyeing the possibility of swapping in another metro DWDM vendor to replace Lucent Technologies Inc. (NYSE: LU), whose Metropolis EON platform has suffered some technical difficulties in trials.

In an interview for a separate story last week, a Lucent spokesperson said field personnel hadn't reported any trouble with the EON product.

What's the upshot? Tellabs and Alcatel are clearly in place on Sprint's metro DWDM menu plan, but what that means remains to be seen. At the same time, though, a win at Sprint could open the doors for both of them to do interesting business elsewhere, as the North American market picks up.

— Mary Jander, Senior Editor, Light Reading

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