8:10 AM With some careful stage managing, the smaller vendor might have a big part of Nortel's optical future

Phil Harvey, Editor-in-Chief

August 18, 2009

1 Min Read
The Ciena Theory

8:10 AM -- Regarding Nortel Networks Ltd. 's Metro Ethernet Networks group, the M&A chatter now turns to Ciena Corp. (NYSE: CIEN).

"Fujitsu and Ciena make the most sense to us. By the way, please don't bring up Sycamore," writes Mark Sue of RBC, in a note to clients today. "Fujitsu can bulk up its market share while Ciena gains a stop gap product line until their 100G optical product gains more meaningful traction."

Sue points out that, while Ciena could use Nortel's optical networking customer base and its 40-Gbit/s product portfolio, it's too small to get swept up in a bidding war against NSN or some other vendor in the space.

"Ciena can expand the opportunity by considering what Nortel wants. In our view, it's not just the highest bid," writes Sue. He notes that Ciena should carefully articulate its intention to buy Nortel's assets, its commitment to the market, and provide "some assurance that the employees will be taken care of."

Providing that kind of clarity might be worth as much to Nortel as a bigger bid from a bigger company, Sue says.

— Phil Harvey, Editor-in-Chief, Light Reading

About the Author(s)

Phil Harvey

Editor-in-Chief, Light Reading

Phil Harvey has been a Light Reading writer and editor for more than 18 years combined. He began his second tour as the site's chief editor in April 2020.

His interest in speed and scale means he often covers optical networking and the foundational technologies powering the modern Internet.

Harvey covered networking, Internet infrastructure and dot-com mania in the late 90s for Silicon Valley magazines like UPSIDE and Red Herring before joining Light Reading (for the first time) in late 2000.

After moving to the Republic of Texas, Harvey spent eight years as a contributing tech writer for D CEO magazine, producing columns about tech advances in everything from supercomputing to cellphone recycling.

Harvey is an avid photographer and camera collector – if you accept that compulsive shopping and "collecting" are the same.

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