Verizon Deal: Too Soon to Hope?
The RFP follows a less formal request for information (RFI) issued back in March, says Verizon spokesman Mark Marchand. It relates to "some additional buildout on our long-haul network," he says, but until the process is complete (no time frame given), the carrier won't comment further.
The RFP's under wraps, so it's tough to tell what's in it. But analysts think it could be the latest turn in Verizon's uneven progress toward creating a nationwide network based on IP (see How Will Verizon Go National?). While no value's been attributed to it, at least one source says the last time Verizon discussed long-haul plans, the price tag was estimated to be between $500 million and $1.5 billion -- though that didn't pan out.
"They were talking about expanding their long-haul network [early in 2003], then said they had substantial assets and wouldn't be spending new money on the network," remarks Farooq Hussain, general partner with Network Conceptions LLC.
While it's too soon to determine whether Verizon plans a real live project this time, folk are buzzing in a low-key way about the RFP. In a recent interview, for instance, Peter Allen, CEO of Innovance Networks, mentioned the company's hopes regarding a new RFP that seems a fit for its tunable photonic gear. Most analysts say Innovance didn't make the short list for the industry's other high-profile long-haul RFP, the Global Information Grid Bandwidth Expansion (GIG-BE) project, an optical network proposal from the U.S. Defense Information Systems Agency (see Analysts Narrow RFP Odds). Allen, it seems, is referring to Verizon.
During last week's earnings call, Ciena Corp. (Nasdaq: CIEN) CEO Gary Smith referred to a significant upcoming long-haul opportunity that would call for Ciena to dip into its long-haul inventory -- though it's just as likely that he could have meant GIG-BE, given that Ciena is said to be a finalist there.
A rundown of other players produces nobody willing to talk. But it's likely Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Corvis Corp. (Nasdaq: CORV), Cisco Systems Inc. (Nasdaq: CSCO), Fujitsu Ltd. (OTC: FJTSY), Lucent Technologies Inc. (NYSE: LU), and Nortel Networks Corp. (NYSE/Toronto: NT) will respond to Verizon's request.
What those responses will contain depends on the kind of architecture Verizon's seeking. In analyst presentations, the carrier has described an optical transport network based on next-generation Sonet and DWDM gear, with multiservice provisioning platforms (MSPPs) at various points of presence to support local services.
"Verizon needs two things: support for SAN traffic, because of the big cities on the East Coast, and support for Ethernet to fend off competitors like IXCs and Time Warner Telecom," says Scott Clavenna, president of PointEast Research LLC and director of research at Light Reading.
Verizon has already picked MSPPs from Fujitsu, and it's got gear from Lucent and Nortel as well, analysts say. Also, routers from Cisco and Juniper Networks Inc. (Nasdaq: JNPR) are on its long-haul links (see Marketing Mantra: Prove Your Worth and Juniper Boosts Spirits).
Besides speculating about who will respond to the RFP and what design will be picked, sources say another big question is whether Verizon will actually shell out for a long-haul overhaul, even if it does make a selection. The carrier has been known to drift on RFPs and RFIs, and it has other priorities right now, including labor problems (see Verizon Strike Averted (for Now)). In this environment, hope for a timely outcome seems misguided.
— Mary Jander, Senior Editor, Light Reading