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DWDM

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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gadfly 12/5/2012 | 4:00:01 AM
re: Infinera Numerates Its Numbers OK ye of little faith
here comes a big one.....

Gad
sohara 12/5/2012 | 3:59:59 AM
re: Infinera Numerates Its Numbers Leave it to Jagdeep and Drew to make a winner. This should be great news for telecom as a whole. The polar caps of the business are melting. Hallelujah.
redface 12/5/2012 | 3:59:58 AM
re: Infinera Numerates Its Numbers At higher bit rate of say 40G, it is much more difficult to send signal for long distance without E/O regeneration. Therefore, Infinera's approach of automatic E/O regeneration at every fiber hop becomes an increasing strength. Infinera is really looking good.
longshort 12/5/2012 | 3:59:57 AM
re: Infinera Numerates Its Numbers Can it be true that NT is in second place?
bitsandbytes 12/5/2012 | 3:59:57 AM
re: Infinera Numerates Its Numbers Don't forget Dave Welch, the 3rd member of the co-founding group. It's both his and his skilled ex-SDL colleagues' know-how that has let Infinera differentiate itself. Dave's a very smart guy and a skilled businessman.

bnb
curiousbuttrue 12/5/2012 | 3:59:55 AM
re: Infinera Numerates Its Numbers It is incredible (as in incredible: so implausible as to elicit disbelief)

Last years equally incredible result of 400Gb/s was fine if you only wanted one wavelength at a time. Electrical cross talk is a real challenge at 40Gb/s.

The reason they have the most 10Gb/s DWDMs shipped is because they have to ship 10 even if you only need one and you need more because of the frequent regenerations.
Consider a 1000km of say a conventional system where for 10Gb/s you would only need one 10Gb/s wavelength. For Infinera you would have 4 regenerations so you would end up with 4x10 or 40 wavelengths shipped.
Because of the different approach you simply canGÇÖt simply compare the number of DWDM wavelength shipped to arrive at real market share.

They donGÇÖt do OEO regeneration GÇ£every fiber hopGÇ¥ because their OEO is still more expensive than an EDFA. It may be cheap but itGÇÖs not that cheap!
TheAce 12/5/2012 | 3:59:54 AM
re: Infinera Numerates Its Numbers Come on Gents....
My 2 cents, he is pumping up the volume with the intention of selling the company.
With no real customer, not to say a portfolio of customers....
Let me do the speculative math here:
suppose 1st month sales = $500K
2nd month sales = $1M and 3rd = $2M.
Under this assumption a company will sell $2M times 2ex9 = 2x512 = $1B by the end of the year.
Can you dig it?
But then I may be (hopefully) wrong....
In any case, I cross my fingers for them. We need any success story we can get.
P.S. Alas, One can hardly see the ROI for the VCs who invested in Infinera/Zepton.
corvo 12/5/2012 | 3:59:53 AM
re: Infinera Numerates Its Numbers just keep wondering why anyone would need / go for ifinera's oeo regeneration at every node when broadwing has already been operating a network successfully with corvis' ooo transport system.
ifinera's jargon of having reduced expenses through a novel form of packaging sounds more and more like "old wines in new bottles"
corvo 12/5/2012 | 3:59:53 AM
re: Infinera Numerates Its Numbers just keep wondering why anyone would need / go for ifinera's oeo regeneration at every node when broadwing has already been operating a network successfully with corvis' ooo transport system.
ifinera's jargon of having reduced expenses through a novel form of packaging sounds more and more like "old wines in new bottles"
lilgatsby 12/5/2012 | 3:59:50 AM
re: Infinera Numerates Its Numbers Corvis is no longer and gear is being decommissioned as possible at their only account - themselves. Pointing out a successful OOO by referencing Corvis is either a joke or an act of ignorance.

Cheers,
lg

----------------------------------------------
just keep wondering why anyone would need / go for ifinera's oeo regeneration at every node when broadwing has already been operating a network successfully with corvis' ooo transport system.
ifinera's jargon of having reduced expenses through a novel form of packaging sounds more and more like "old wines in new bottles"
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