Infinera Adds to Euro Footprint
Little in the way of detail has been announced, but as EWE TEL, which runs its own infrastructure, serves only 300,000 customers in Northwest Germany, the purchase order is hardly likely to have a dramatic impact on Infinera's top line. The engagement with EWE TEL is being handled by systems integrator NK Networks & Services, which is now acting as the vendor's sales and marketing partner in Germany, Austria, and Switzerland. (See Infinera Names Euro Partner.)
It's another sign, though, that Infinera is emerging as a rival in Western Europe to the established optical set: Regional and long-haul optical networking contracts are often contested, and subsequently won, by a core group of vendors including ADVA Optical Networking , Alcatel-Lucent (NYSE: ALU), Ciena Corp. (NYSE: CIEN), the former Marconi part of Ericsson AB (Nasdaq: ERIC), Huawei Technologies Co. Ltd. , Nokia Networks , Nortel Networks Ltd. , Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA), and Transmode Systems AB .
Infinera has three other named customers in Europe: German ISP Freenet AG , pan-European carrier Interoute Communications Ltd. , and Level 3 Communications Inc. (NYSE: LVLT), which provides connectivity to EWE TEL outside its service region in Germany. Infinera says it has other European customers it can't currently name. (See Freenet Deploys Infinera, Infinera Reaches Level 3, Infinera Muscles Into Interoute, and Level 3 Signs EWE TEL Deal.)
While the vendor, which has seen its share price rise more than 50 percent to $24.41 since it began trading on Nasdaq earlier this month, lacks an announced Tier 1 operator customer in the region, it's not short of vocal support from its European users. (See Infinera Goes Out – And Up.)
Interoute's CTO, Matthew Finnie, has praised the capabilities of Infinera's technology on a number of occasions. He says his engineering team is finding that the vendor's DTN platform "does exactly what it says on the tin," and that it can be deployed and put into commercial services within just a few months. (See Infinera Muscles Into Interoute.)
That speed of deployment, coupled with a simple-to-manage provisioning capability, means Interoute can respond to its wholesale customers' demands for capacity in a matter of days instead of weeks or months, claims Finnie, who says demand for bandwidth is "going through the roof." (See Interoute Offers Rapid Capacity.)
Level 3 is equally effusive about Infinera's technology. At a recent Light Reading event in London, Uwe Nickl, the carrier's European VP of marketing, noted there was a lack of "disruptive technology advances" between 1998 and 2004, but the situation changed in 2005 with the introduction of photonic integrated circuits (PICs), the basis of Infinera's platform. (See Infinera PICS Up at ECIC.)
The deployment of platforms based on PICs "dramatically reduced the [per bit] costs of transport," said Nickl, who claimed that reduction was as high as 70 percent. "Carriers must invest in the latest disruptive technology. You need the lowest-cost infrastructure… It's all about economies of scale."
That kind of economics has certainly attracted the attention of major carriers, with BT Group plc (NYSE: BT; London: BTA) CTO Matt Bross having stated last year that he's tracking Infinera's developments. (See Infinera Numerates Its Numbers.)
In addition, Light Reading understands that BT now has first-hand insight into how Infinera's platform performs in the field. Level 3, one of a number of wholesale carriers providing BT with capacity in Europe, is believed to have lit some BT fiber on the U.K. incumbent's behalf using Infinera's DTN platform.
Neither BT nor Level 3 were able to confirm that particular use of Infinera's technology by the time this article was published, while Infinera says it can't comment on any relationship with a carrier until it issues an official announcement.
Further details of Infinera's business in Europe may emerge when the company issues its second-quarter earnings report. While no date has been set for the announcement, it's likely to be around late July or early August, as the vendor's current quarter ends June 30.
In the first quarter of 2007 Infinera recorded a net loss of $19.8 million from revenues of $49.2 million. (See Infinera Builds in Q1.)
— Ray Le Maistre, International News Editor, Light Reading