Tellabs Joins 21CN Ranks

Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) has been added to the growing list of preferred system suppliers for the BT Group plc (NYSE: BT; London: BTA) 21CN next-generation network.

Tellabs CEO Rob Pullen made the announcement today during his company's investor day presentations.

Neither party is providing anything in the way of financial, geographic, or timescale detail, with Tellabs limiting its official confirmation of the engagement to a short statement: "Tellabs has been selected as BT’s preferred, strategic partner and 21CN vendor for Managed Ethernet Access for Mobile Operators."

Tell it like it is, guys!

But here's what we do know: British mobile operators want managed voice and data traffic backhaul services that will help them contain and manage their costs as 3G data volumes grow, and BT has reacted relatively quickly with a service offering. (See MBNL Backhauls With BT and BT Wins New O2 Deal.)

As exclusively revealed by Unstrung (our sister site) in July, Tellabs got the call to provide elements of its mobile backhaul solution (its 8600 product line) so that BT could meet upfront demand from Vodafone UK , which struck a five-year deal with BT in April this year. (See BT Uses Tellabs for Ethernet Backhaul and Tellabs Touts 3G Switch.)

Those initial deployments have now developed into a full-blown 21CN supplier deal for Tellabs, which leaves it well placed to supply BT with its mobile backhaul equipment to cover thousands of base stations in the U.K. and possibly even extend the relationship overseas, where other national carriers have been much slower than BT to identify the potential of offering managed backhaul services to mobile operators.

According to sources, the real driver behind the BT/Tellabs deal is Vodafone, which is keen on developing an Ethernet-based backhaul strategy as it ramps up its 3G business. Other operators have been more cautious about using Ethernet-based technologies to transport their precious voice traffic, and have been testing the waters by offloading only data traffic onto the Ethernet connections. (See Carriers Don't Trust Ethernet Backhaul?)

Tellabs joins a roll call of major vendors, plus some more specialist suppliers, in BT's 21CN club. (See BT Closes 21CN Deals, Touts IPTV, Vendors Sign BT 21CN Contracts, Ciena Takes ANDA Into 21CN, Sonus Gets BT 21CN Win, Fujitsu Touts 21CN Progress, ADVA Lands 21CN Deal, Nortel, Siemens Win PBT Deals at BT, and Ubiquity Leads New Round of 21CN Deals.)

And while some of the shine has gone off the 21CN project in recent times, as strategies and timelines have shifted, the project is still one of the leading next generation network migration projects in the world, and so is closely watched by other carriers. Essentially, 21CN is still regarded as a good shop window for the vendors involved. (See Ethernet Benefits From 21CN Rethink, BT Touts 21CN Progress, New Service, and BT Aims to Finish 21CN in Late 2011.)

Backhaul a cornerstone of Tellabs strategy
Wearing the 21CN badge, then, should only boost Tellabs's chances of landing more new business from fixed and mobile operators looking to build backhaul networks to transport wireless traffic.

Pullen identified the mobile backhaul sector as one of his company's key target markets in the coming years, along with business services delivery, dynamic optical networking, and professional services. The CEO said he expects the mobile backhaul market opportunity to grow from about $1.3 billion this year to about $5 billion in 2011. And that's why it's a market that's attracting plenty of attention. (See AlcaLu Plugs Its Backhaul Hole, Cisco Raises Ethernet Backhaul Stakes, and ECI Targets Wireless Backhaul, OSS.)

The CEO said Tellabs would be: adding to the Ethernet switching line it announced just yesterday to meet carrier demand for "high capacity, improved density" carrier Ethernet equipment with a lower entry price; further developing the company's optical capabilities to meet real mesh network requirements; and addressing operators' needs for intelligent radio access network (RAN) capabilities and content management technologies. (See Tellabs Gets Edgy With Ethernet.)

"We're in the right markets, and they're big and they're growing," boasted the CEO.

Pullen also stressed that Tellabs is a debt-free company with $1.2 billion in cash and short-term securities, and so it is well placed to weather the global economic storm. He also noted that he was very close to appointing a new CTO, who would come from outside the company.

— Ray Le Maistre, International News Editor, Light Reading

digits 12/5/2012 | 3:27:03 PM
re: Tellabs Joins 21CN Ranks A combination of bullish investor day presentations, positive customers news, and the resumption of a share buyback


sent Tellabs' share price up by $0.44, nearly 11%, to close at $3.99 Thursday.

The question now might be -- what's TLAB going to do with all that legacy gear that's clogging up the portfolio?
And did FTTx get a mention in the investor day?
Sign In