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DWDM

Is Infinera In at BT?

Optical equipment vendor Infinera Corp. (Nasdaq: INFN) saw its share price rise 9.45 percent Wednesday after a report from investment research house Detwiler, Mitchell & Co. suggested it's in trials at BT Group plc (NYSE: BT; London: BTA) and could be on course for a six-year deal worth more than $600 million.

BT declined to comment, while Infinera says it can't "comment on any discussions or relationships we may have with any customers or potential customers until we make an announcement."

There's skepticism elsewhere that such a deal could be likely. In an emailed note sent out Thursday, Jefferies & Company Inc. analyst George Notter stated: "While we believe that the likelihood of Infinera ultimately penetrating Tier 1 carriers is increasing, the speculation about British Telecom raises some doubts for us."

Notter notes that "$600 million is a gigantic amount of long haul WDM infrastructure," and adds that BT is already way down the line with its deployments of gear from Ciena Corp. (NYSE: CIEN) and Huawei Technologies Co. Ltd. , which will have "integrated their element management systems into BT’s OSS systems. It seems unlikely to us that BT... would seemingly change network architectures" at this stage. (See BT's 21CN Deals: Booty or Bloody? and BT Unveils 21CN Suppliers.)

Still, Notter adds, "it wouldn’t surprise us if Infinera equipment is in the labs at British Telecom (or a multitude of other Tier 1 carriers for that matter). BT (and any other well-run carriers) should continually be evaluating vendor equipment in the normal course of running their business."

And it wouldn't surprise Light Reading either. When we asked BT's CTO Matt Bross about Infinera in March 2006, he stated that Infinera "was evaluated as part of the 21CN process. We're up to the minute with what they're doing." (See Infinera Numerates Its Numbers.)

Bross also added at the time that the capabilities Infinera's gear can deliver would "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, which today announced a new deal in Eastern Europe, is set to report its first quarter financials next Tuesday, April 22. Its stock closed Thursday up another $0.58 (4.25%) at $14.24. (See Bulgartel Picks Infinera.)

— Ray Le Maistre, International News Editor, Light Reading

ninjaturtle 12/5/2012 | 3:43:02 PM
re: Is Infinera In at BT? I wouldn't count INFN out of any potential Tier 1 customer. They have been in trails with Sprint, AT&T, BT, Verizon and a few more. It not a matter GǣifGǥ it's a matter of
when at this point. I also think INFN is driving the timing of these deployments as to not bite off more then they can chew. The secondary has been used to increase product and development both at the PIC level and the systems test level. INFN will be a Billion (in sales) by 2010. Mark your calendars!!!
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