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Infinera Incumbent Question

Peer Pressure
Peer Pressure
Peer Pressure

9:00 AM -- A funny thing happened during Infinera Corp. (Nasdaq: INFN)'s recent earnings call. And no, I'm not talking about the missed guidance that sent its stock reeling. (See Infinera Profits, But Gives Lower Forecast and Infinera's Q2 Blues.)

Hidden in the call, in a blink-and-you'll-miss-it moment, CEO Jagdeep Singh just might have signaled that the company bagged its first big Tier 1 account.

While discussing company highlights, Singh told listeners on the call that the company saw traction in "important new segments, including with incumbent carriers worldwide."

It all sounds innocuous enough, or at least ambiguous enough, that some listeners might have missed it. For instance, Lehman Brothers analyst Inder Singh -- no relation to Jagdeep -- says he thought "incumbent carriers" referred to carriers that Infinera had already won deals with.

But when Light Reading asked how things were going on the Tier 1 front after earnings were released, here's what CEO had to say:

"We haven't publicly announced anything on the Tier 1 front. Actually, we call it the incumbent carrier front."

He used the phrase again later in the conversation when talking about segments of the market that Infinera could penetrate better:

"The places where we are under-penetrated, and that we would expect growth in share over time, are the incumbent carriers, international carriers, and to some extent the low-end metro."

That's not to say that Infinera has won anything yet. It's probably worth noting that the company is rumored to be in trials with BT Group plc (NYSE: BT; London: BTA) -- although some analysts have their doubts. (See Is Infinera In at BT?)

— Ryan Lawler, Reporter, Light Reading

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