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Energis Deal Energizes Xtera

Light Reading
News Analysis
Light Reading
6/28/2005

National U.K. operator Energis plc (OTC: ENGSY) is deploying long-haul transport equipment from Xtera Communications Inc. to build a new optical network, according to two sources close to the deal.

That's a big deal for Xtera, which has announced only as a customer to date.

In 2000 and 2001, Xtera was one of the most watched startups in the long-haul DWDM transport space but, at that time, it was selling subsystems to DWDM vendors rather than fully built systems (see Going Long On Light and Xtera's $110M Surprise).

It finally got into the systems business in 2002, just in time for the market to go south and the startup competitors to start dying off in large numbers (see Ceyba Shuts Down and Ex-PhotonEx? ).

But even in a dreadful market, Xtera somehow survived and stayed funded (see Xtera Scores Surprise $30M). And, after a reorganization, the company acquired some technology from a failed metro MSPP vendor and decided to pursue the submarine optical transport market as well as specific technology opportunities at carriers outside the U.S. (See Xtera Nabs Metro-Optix Assets, Xtera Intros Submarine DWDM Systems, and Xtera's Long-Haul Regeneration.)

That new approach paid off at Flag Telecom and it has paid off again at Energis.

So what's Xtera doing there? Sources say Energis is deploying the Xtera gear to build a communications network for the BBC.

The operator is working with Siemens Business Services to provide business process outsourcing (BPO) services to the BBC as part of a £2 billion (US$3.7 billion) technology services deal Siemens signed with the broadcaster last year (see Energis Wins BBC Deal With Siemens). The 10-year deal sees Siemens running the BBC's global IT infrastructure and media services business.

BPO is becoming increasingly popular among companies as a way to cut costs and concentrate on core business activities. The BBC expects to save around £30 million ($54.7 million) annually by outsourcing its technology services.

Energis has been managing the BBC’s television and radio distribution network since 1993, and the deal with Siemens puts it in charge of most of the Beeb’s communications needs.

Xtera said last week it is to open five new sales and support centers, including one in France to cover the EMEA region, “following successful customer wins and a flawless deployment of an all-optical multi-service network.” (See Xtera Expands Support.)

Xtera could not be reached for comment for this story.

— Nicole Willing, Reporter, Light Reading

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