Corona Networks Disappears

Corona Networks Inc., a six-year-old IP edge router startup, seems to be in the dumper, raising questions about its partnership agreement with Alcatel SA (NYSE: ALA; Paris: CGEP:PA).

Rumors of Corona Networks' demise are rampant; sources say the doors shut Friday and that 60-odd remaining employees are gone. Many phone numbers given on the company Website no longer work; and at least one office, in Cary, N.C., seems to have become the property of a townhouse developer.

Voicemail still works for several Corona Networks execs, including CEO Ramandeep Singh, but none returned calls. Today, an assistant in the offices of VC firm Redwood Venture Partners LLC said Bharat Gupte, a director at Redwood who's familiar with Corona, had confirmed the startup's closure.

Gupte didn't return calls and email at press time.

The news and the secrecy aren't surprising. Corona's been struggling for months with layoffs and funding crises, while trying to keep things quiet (see Headcount: Mississippi Spurning).

A big question is: If Corona Networks is history, what will happen to a deal it had to supply Alcatel with a broadband remote access server (B-RAS) for the French vendor's 7301 DSLAM? That deal originally appeared to help Corona get $8 million in Series D funding back in April (see Corona Gets a Boost).

Alcatel isn't saying much. "We can't comment on the situations of other vendors," says Jay Fausch, senior director for Alcatel's Fixed Communications group. He says Alcatel will live up to any customer commitments it's made to put that B-RAS module into Alcatel's 7301 DSLAM. But he won't comment on how many such commitments have been made.

Reportedly, in choosing Corona Networks for the B-RAS job, Alcatel shunned Redback Networks Inc. (Nasdaq: RBAK) last year (see Redback, Alcatel Close to Alliance). Now that things may have changed, could talks reopen?

Redback wouldn't comment at press time. Still, in an interesting ripple, Nokia Corp. (NYSE: NOK), an investor in Redback that competes with Alcatel in broadband access and other areas, has reduced its stake in Redback, officially in order to pare down "liquid assets." In a filing with the Securities and Exchange Commission (SEC) dated Monday, Nokia said it owns a 3.4 percent stake in Redback, compared with 10 percent owned last year.

Still, it's not clear whether Alcatel would consider a reduced stake an improvement over a large one.

Alcatel faces a challenge now, since other makers of compact B-RAS products include companies that compete in one way or another with Alcatel: Cisco Systems Inc.(Nasdaq: CSCO), Copper Mountain Networks Inc. (Nasdaq: CMTN), Juniper Networks Inc. (Nasdaq: JNPR), and Network Equipment Technologies Inc. (net.com) (NYSE: NWK), for example (see Carriers Want a Little B-RAS on the Edge).

NOTE: Please note that Corona Networks is not to be confused with Corona Optical Systems Inc., another startup that makes optoelectronic components and is still operating.

— Mary Jander, Senior Editor, Light Reading