CoSine Flies From Spanish Deal

A storm in a teacup blew up over a story Light Reading published last week, which said, among other things, that Lucent Technologies Inc. (NYSE: LU) had beaten out CoSine Communications Inc. (Nasdaq: COSN) to win a contract to supply its SpringTide 7000 IP Services Switch to a small Spanish telecom operator (see Euro CLEC Says 'Oui' to Atrica).

CoSine acknowledges that it bid for the work for Barcelona-based competitive local exchange carrier (CLEC) Al-Pi Telecomunicacions, (not to be confused with Alpo, which is dog food). But it has a different story regarding its outcome. To wit, CoSine says it walked away from the Al-Pi deal.

"We evaluated the deal back in May and determined that it wasn't an optimal deal for us," says Len LuPriore, CoSine's VP of corporate communications. According to CoSine, the Al-Pi network only required one big IP services switch to handle the 400 business customers that needed service. Plus, the deal required an "extended payment cycle," meaning Al-Pi wanted to pay for the switch over several months, not all up front, according to LuPriore.

"We just looked at it and decided that this is one we would pass on," he says.

Al-Pi officials could not be reached for comment on Monday.

Although Al-Pi is a tiddler of a telecom operator, it’s part owned by France Telecom SA. And there’s little doubt that others involved in the project, notably Atrica Inc., are hoping that a big success with Al-Pi might seed a much bigger project on France Telecom’s home turf.

This probably also explains why CoSine points out that it already has a deal with another company owned by France Telecom – namely Equant (NYSE: ENT; Paris: EQU). In June, CoSine announced that Equant would deploy its IPSX 3500 IP service switch in North America, Europe, and the Pacific Rim region. CoSine won't say how many units it sold nor how large its deal with Equant is.

Equant, it should be noted, is not mentioned in any of CoSine's financial filings as being a significant contributor to the firm's revenues.

— Phil Harvey, Senior Editor, Light Reading
http://www.lightreading.com

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