Infinera's Smoking Gun

3:25 PM -- Analyst Andrew Schmitt of Infonetics Research Inc. brings this one to our attention: On July 31, Infinera Corp. (Nasdaq: INFN) filed an 8-K tacitly admitting that it's lost some Level 3 Communications Inc. (NYSE: LVLT) business to Huawei Technologies Co. Ltd.

Word of Level 3's change of heart had spread in late July. (See Is Huawei in at Level 3?)

Granted, the filing doesn't mention Huawei by name. But it does talk about potential lost business beginning in 2010, and Huawei seems the likely culprit. Here's the text.

On July 29, 2009, we were informed by Level 3 Communications (“Level 3”) that they intend to use another DWDM vendor in their network. We believe that this vendor will be given a significant portion of Level 3’s new network deployments commencing in the first half of 2010. Level 3 has informed us that they intend to continue to purchase products and services from us, including equipment to fill the capacity on their existing Infinera DTN systems. We believe that the introduction of another vendor will impact the revenue we will receive from Level 3 beginning in the first half of 2010.

— Craig Matsumoto, West Coast Editor, Light Reading

paolo.franzoi 12/5/2012 | 3:59:12 PM
re: Infinera's Smoking Gun

George Notter published a piece before the Infinera Conference Call that Huawei had been awarded some 40G business.  I am under the impression that Infinera does not yet have a 40G product.



Stevery 12/5/2012 | 3:59:12 PM
re: Infinera's Smoking Gun

Funny, your link to the 8-K starts with a change to the bonus plan:

(e) On February 10, 2009, the Compensation Committee (the “Committee”) of the Board of Directors of Infinera Corporation (“Infinera” or the “Company”) approved the Fiscal Year 2009 Bonus Plan (the “Bonus Plan”) to establish the target bonus amounts and payout criteria for all eligible employees of the Company at the director and vice president level, including the Company’s named executive officers.

Then it goes on about that Level 3 unpleasantness.  I really hope that they didn't award extra monies just before losing the Level 3 biz.

olsen 12/5/2012 | 3:59:12 PM
re: Infinera's Smoking Gun

Please do som digging, Craig. Would be very interesting to know the answer.

photon2 12/5/2012 | 3:59:00 PM
re: Infinera's Smoking Gun

Huawei told me directly they won that account.  It's a done deal.


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