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Intel Invests in Optical Solutions

Every million counts, these days. Passive optical network (PON) equipment maker Optical Solutions Inc. said Wednesday it raised some new funding from Intel Capital to finish off a $24 million Series F financing round. The round's first closing of $22 million was announced in May, and Optical Solutions has since added $2 million from Intel and other investors (see Optical Solutions Gets $22M).

Optical Solutions' products combine voice, video, and data on an all-optical network that terminates at the customer premises. Its kit includes a transport system that takes voice, video, and data feeds from the service provider's central office and shuttles them as digital signals to the customer premises, where another device converts the optical signals to electrical signals compatible with the home's or business's existing phone, data, and TV wiring.

The company says it has raised $127 million in debt and equity financing since its inception. It employs 106 people and has 37 customer deployments so far, according to Chief Financial Officer James Stewart.

Stewart says it's a misconception that fiber-to-the-home (FTTH) technology is only useful to so-called greenfield carriers powering new housing developments. "About 60 percent of our customers are independent carriers and about 20 percent are small cities and municipalities," he says.

Optical Solutions competes with several PON vendors, not to mention other access technologies such as broadband wireless and cable (see PON Pushers Huff and Puff). Alcatel SA (NYSE: ALA; Paris: CGEP:PA) is the only vendor Stewart says his company sees in the field on a regular basis.

FTTH costs more to deploy than turning on existing cable or DSL broadband connections, but such deployments are seen as a large driver to PON technology, which uses passive splitters to deliver signals to multiple users on a fiber network (see Optical Access). FTTH installations are expected to climb to 315,000 homes passed in 2003 and between 800,000 and 1.4 million by 2004, according to one market research report from Render Vanderslice & Associates (see Home-Fiber Optimism).

"[Optical Solutions] has done reasonably well for that vintage of company," says Richard Mack, VP and general manager of KMI Corp.. Mack says the company was wise to focus on smaller, independent phone companies because, though there was a lot of RBOC interest in PON years ago, "they never did much about it."

It's not surprising that Intel Capital would hedge its access bets by investing in Optical Solutions. Intel Capital's other investments include wireless broadband gear maker Navini Networks Inc. and wholesale DSL provider New Edge Network Inc.

Optical Solutions' previous investors include Sprout Group, Coral Ventures, H.I.G. Capital, Boston Millennia Partners, Menlo Ventures, and St. Paul Venture Capital.

— Phil Harvey, Senior Editor, Light Reading
www.lightreading.com
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porn starr 12/4/2012 | 9:12:11 PM
re: Intel Invests in Optical Solutions I can only imagine what the valuation was.
fiber_to_toilet 12/4/2012 | 9:12:09 PM
re: Intel Invests in Optical Solutions Intel investment is small but wise. Intel knows Last mile would be FTTH,Ethernet or Wireless DSL or such and that means DELL can sell more PCs to hungry VOD/Porn-VideoConferencers. I bet everyone here FTTH would be the standard for lastmile in 4 years from now and IBM ( cant belive huh ? )would buy Optical.





ivehadit 12/4/2012 | 9:11:55 PM
re: Intel Invests in Optical Solutions f_t_t says

"Intel investment is small but wise. Intel knows Last mile would be FTTH,Ethernet or Wireless DSL or such and that means DELL can sell more PCs to hungry VOD/Porn-VideoConferencers."

is porn-videoconferencing the latest killer app?
dietaryfiber 12/4/2012 | 9:11:54 PM
re: Intel Invests in Optical Solutions OSI has recently lost most of its senior engineering team. It will be interesting to see if Darryl Ponder can keep this ship upright.

dietary fiber
pigglywiggly 12/4/2012 | 9:11:53 PM
re: Intel Invests in Optical Solutions ivehadit it said:

"is porn-videoconferencing the latest killer app?"

Porn has ALWAYS been the killer app.
Steve Saunders 12/4/2012 | 9:11:52 PM
re: Intel Invests in Optical Solutions Peter has some opinions (opornions?) on this subject.

I will ask him to stop by.

Steve
BackSlash 12/4/2012 | 9:11:52 PM
re: Intel Invests in Optical Solutions A friend who runs an ISP says that 72-85% of traffic during the day is x-rated.. Good to see.. increase that demand... MORE bits.. kill that OC-48 with streaming whatever.. .. ok bad choice of words..

Nice surfing at work... (But is Lightreading X-rated?...?)

/
BobbyMax 12/4/2012 | 9:11:46 PM
re: Intel Invests in Optical Solutions The passive optical networking technology is not cost effective in the US.Its mass scale deployment in the US is questionable. The technology is there.
fiber_to_toilet 12/4/2012 | 9:11:39 PM
re: Intel Invests in Optical Solutions dietary fiber says

"OSI has recently lost most of its senior engineering team. It will be interesting to see if Darryl Ponder can keep this ship upright"

He has managed it pretty well so far through tough times. I assume if he sees it through Jan 2004, HE DUNNIT!


fiber_to_toilet 12/4/2012 | 9:11:39 PM
re: Intel Invests in Optical Solutions BobbyMax:

Same was said about Color television , Personal Computers & Internet. Its just a matter of time....and time will prove I am correct. The cost comparison of Fiber to Cable is very compelling and re-wiring america would be rewarding over a long run.
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