Ciena and Cisco have been tipped to land the metro 100G business at Verizon, according to financial analysts who follow the optical equipment sector.
Ciena Corp. (NYSE: CIEN) was already locked down as a likely winner of some metro 100G transport purchase orders from Verizon Communications Inc. (NYSE: VZ), but now Cisco Systems Inc. (Nasdaq: CSCO) has emerged as the other vendor likely to land business in what could well be a dual-source rollout. (See Ciena Seen as Verizon 100G Metro Favorite.)
Both Alex Henderson at Needham & Co. and Simon Leopold at Raymond James Financial Inc. (NYSE: RJF) believe those two vendors are set to be invited for tests and trials ahead of late-2015 deployments and significant rollouts from 2016, with Coriant also favored but seemingly unlikely to land any business unless either Ciena or Cisco trip up in the trials.
If there were other optical vendors whose name began with a 'C' then they may also have been in the running but it looks like, this time, Alcatel-Lucent (NYSE: ALU), Fujitsu Network Communications Inc. and Infinera Corp. (Nasdaq: INFN) have missed out.
The analysts expect that the rollout should be worth $200 million or more in total per year split between the two vendors, with Ciena expected to pick up the majority of the business. The analysts also believe the deals will result in positive business for a number of optical components firms that supply Ciena and Cisco: Henderson believes more than 10,000 ROADMs will be deployed over time by the operator.
Beyond the modest positive financial impact for the vendors involved, Verizon's decisions and strategy will be closely watched by other operators looking to modernize their metro networks with packet-optical platforms that will be more efficient than legacy systems, which could be decommissioned as the new systems are introduced. (See OTN Innovation Boosts Metro 100G.)
Verizon's project "represents an evolution of the convergence of optical and packet transport thus providing an indication of what other operators might do when networks begin evolving globally," states Leopold in a research note.
— Ray Le Maistre, , Editor-in-Chief, Light Reading