Infinera Numerates Its Numbers

LONDON -- Optical transport vendor Infinera Corp. (Nasdaq: INFN) talked big numbers here today as it boasted lab demonstrations of an integrated 1.6-Tbit/s optical chip and revealed its current revenue numbers. (See Infinera Demos 1.6-Tbit/s Chip.)

CEO Jagdeep Singh and his team have kept the firm's sales under wraps until now, but he told Light Reading today that current business puts Infinera's annualized revenue run rate at "more than $100 million," a rapid ramp-up, given that the company didn't start shipping its DTN optical transport system until December 2004. (See Infinera Goes Live.)

That suggests anticipated revenues of $25 million in the current first quarter of 2006, though it's not clear whether its recently announced win with XO Communications Inc. is contributing to that figure. (See XO Selects Infinera.)

That revenue revelation follows market research data from Dell'Oro Group that gave Infinera a market leading position in the 10-Gbit/s long-haul DWDM market in the fourth quarter of 2005, with a 26 percent share, up from 20 percent in the third quarter. Nortel Networks Ltd. ranked second in that quarter with a 15 percent share.

That helped Infinera lead the market for the whole of 2005, with 5,343 wavelengths deployed for a 20 percent market share, ahead of Nortel with 16.6 percent and Alcatel (NYSE: ALA; Paris: CGEP:PA) with 9.4 percent. (See Infinera Claims 10G Lead.)

That sort of performance is attracting attention at the highest levels. BT Group plc (NYSE: BT; London: BTA) CTO Matt Bross told a closed meeting in London that he's monitoring Infinera's developments closely and that it's possible the company's technology could become part of the carrier's next-generation network, the 21CN.

The carrier last year announced Ciena Corp. (NYSE: CIEN) and Huawei Technologies Co. Ltd. as its 21CN optical transport vendor partners. (See BT Closes 21CN Deals, Touts IPTV, BT's 21CN Deals: Booty or Bloody? , and BT Unveils 21CN Suppliers.)

But with Infinera making bold claims about the significant cost savings its photonic integrated circuits can deliver to carriers, is there room for BT to source technology from further vendor partners?

Absolutely, say the two BT executives pulling the 21CN strings. BT Wholesale's Paul Reynolds says that, while the carrier has eight leading vendor partners, "we've never said that the partnering choices end there. We're driving the partners to deliver the best -- they need to bring it to the table if they don't have it themselves."

Reynolds notes that "behind those eight main partners sit another 150 or more smaller players" that can help deliver the technology BT needs. (See Siemens Unveils 21CN Partners, Alcatel Names Its 21CN Partners, Ericsson to Bring Partners to 21CN Party, BT's 21CN: Metro Partners Under Wraps , and Fujitsu Shares Its 21CN Success.)

CTO Bross says Infinera "was evaluated as part of the 21CN process. We're up to the minute with what they're doing" and how it applies to what BT is trying to do in its network. He adds that the capabilities Infinera can deliver will "either be met by comparable technology from our existing suppliers or we'll be using it [Infinera's technology] in the future. I don't think our existing suppliers are complacent about that situation."

Infinera's communications director, Jeff Ferry, declined to comment on any specific relationship with BT, other than to say that the company is "very interested in doing business with BT."

He also declined to comment on whether Singh would be meeting BT's technical team while he's in London this week. The CEO is visiting Europe to try and drum up new business and talk about the market potential for new optical systems in the region, where it now has 12 sales staff.

Infinera already has an ISP customer in Germany, Freenet AG , and has been deployed by FLAG Telecom Ltd. in its European metro rings. Singh adds that another customer, this time in France, is about to go live. (See Infinera Wins Flag Deal.)

The company won't say exactly how many customers it has in total and won't comment on whether Google (Nasdaq: GOOG) is one of them. (See Infinera Courts Rumors .)

Business is growing quickly, though, so will the company need more finding to help its expansion? Singh says the company has raised $203 million to date and "will do what makes sense" to meet its future cash needs. Could that include an IPO? "I can't comment directly, except to say we meet all the criteria analysts specify" for a company preparing its initial public offering, says the CEO.

And what of the monster 1.6-Tbit/s capabilities announced today? When will that be commercially available? "We've said nothing about commercial availability," says Ferry. — Ray Le Maistre, International News Editor, Light Reading

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