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June 4, 2002
ATLANTA -- Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) announced today it has added yet more bells and whistles to its 6400 metro transport switch, which it acquired from Ocular Networks (see Tellabs Adds to 6400 Series). The company has added Ethernet over Sonet via virtual concatenation, a technique where Sonet channels can be resized without wasting bandwidth. The technique involves glomming together the smallest channels -- STS1s (51.8 Mbit/s) -- to make suitably sized pipes for Ethernet data to be carried.
With the announcement, Tellabs is singing from the same songbook as all the other systems vendors here. They’re trying to make it easier for incumbent carriers to add data services without causing them to give up any of their voice services or forcing them to build overlay networks just for data services.
While hoping to improve its stock with incumbent carriers – and to avoid displacement by competing vendors – the company announced the following product improvements this week:
It has enhanced its 6500 transport switch, formerly the TITAN 6500 Multiservice switch, that allows carriers to do broadband grooming up to 25 miles away from the main switch chassis without need an add/drop multiplexer at the other end (see Tellabs Enhances Switches). Though it won’t be widely available until 4Q02, Tellabs customers Sprint and Verizon already have switches with the new capability installed, according to Steve Kemp, group manager of marketing for Tellabs.
It added a 10 Gbit/s transponder to its 7100 metro DWDM box, which lets carriers upgrade their metro networks to handle high-speed Sonet or Ethernet connections (see Tellabs Improves 7100 System). The improved switch competes with the likes of ONI Systems Inc. (Nasdaq: ONIS), Ciena Corp. (Nasdaq: CIEN), Nortel Networks Corp. (NYSE/Toronto: NT) and many others and will be available in 3Q02.
Thanks largely to Moore’s Law, Tellabs has beefed up its 5500 digital crossconnect by adding smaller, faster electronics to handle up to six times the density that it currently does. The switch currently can scale up to 3,072 DS3 equivalent connections. The improved switch is expected to be available early next year, though it was on display here at Tellabs’ booth.
This follows the company’s announcement of a customer win at Broadwing Inc. (NYSE: BRW) last week, a deal that helped it further justify the Ocular Networks acquisition (see Tellabs Sees Ocular Upside).
Indeed, Tellabs is humming the tune that carriers want to hear. What they can’t be so sure of, however, is how long the carriers will continue to spend as slowly. In the past two months, Tellabs has remained profitable, but its revenues have dropped and it had to lay off workers while closing and consolidating plants (see No Surprises From Tellabs).
Wall Street waits with baited breath to see when Tellabs product improvements will pay off. “At this point, we fear that ongoing capex reductions could continue to impact Tellabs into the June quarter,” wrote Deutsche Banc Alex Brown LLC analyst George Notter, following the company’s most recent earnings conference call.
In the meantime, though, the old horse of the telecom equipment space hopes it can convince attendees here it can still gallop with the best of them. “We’re about two things: getting our customers on track to make money and helping them wring costs out of their networks,” says Kemp.
— Phil Harvey, Senior Editor, Light Reading
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