Optical components

LightConnect Sticks to Long Haul

When startups say they're in it for the long haul, they're usually talking about a time frame, not a type of network.

But LightConnect Inc. is taking the firm stand that long-reach networks are the place to be -- even as a host of its peers, having initially set out for long-haul treasure, have changed course for metro and access networks.

"We believe there's actually more value for us to stay the leader in the high end of that market," says Yves LeMaitre, vice president of marketing.

A risky bet, to be sure, but the company's got something to show for it. Today, LightConnect announced it had won a contract to provide dynamic gain equalizers (DGEs) to Chinese equipment firm ZTE Corp. (see LightConnect Lands ZTE Deal). Specifically, LightConnect's DGE will be used in the ZXWM160, a 10-Gbit/s DWDM transport system with 160 channels across the C and L bands.

The foothold in China is a critical step, because it's one of the few countries that's still aggressively building long-haul networks, says LeMaitre.

The deal is worth "a couple million" dollars, LeMaitre says, which puts it in the range of the $2 million LightConnect earned during all of 2002. LeMaitre claims LightConnect has increased its revenues in each of the last eight quarters (although it was starting from zero), and he's expecting revenues between $5 million and $10 million for 2003.

LeMaitre claims LightConnect has 50 customers and is seeing "significant action" for its VOA. Funding-wise, the company picked up a $9 million Series C round in September (see LightConnect Ramps Up With Cash).

Still, long-haul markets aren't the fertile ground they once were. And the market for DGEs themselves is only starting to blossom, measuring $12 million in 2001 but growing at a predicted 107 percent per year, according to research firm ElectroniCast Corp. (see ElectroniCast: DGE Market to Boom).

Of course, one might ask if LightConnect is staying in the long-haul market simply because a move to other markets isn't feasible. In fact, LeMaistre points out that the type of product that LightConnect builds may not be the right fit for other markets.

"We might look at that if we find the right partners, because in that market, you're probably better off finding somebody that can build the amplifier and integrate the dynamic gain equalizer," he says. "In that market, they would not buy a discrete DGE."

— Craig Matsumoto, Senior Editor, Light Reading
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