Nortel Networks Ltd. cracked open the Molson this morning as official word finally got out that it beat Ciena, Alcatel-Lucent, and others to become a major part of Verizon Enterprise Solutions 's ultra long-haul network in Europe. (See Nortel Wins Verizon Deal.)

Nortel says the network is based on its Optical Multiservice Edge (OME) 6500 converged optical platform, and will provide 10-Gbit/s and 40-Gbit/s connectivity to meet growing bandwidth requirements being driven by video and advanced business services.

"This is a fantastic win for us," says Philippe Morin, president of Nortel's Metro Ethernet Networks. "Verizon made a vote of confidence on our 10-gig and 40-gig technology."

Morin points to the OME 6500's ability to serve both 10-Gbit/s and 40-Gbit/s links, which will allow Verizon to deploy the equipment and choose between 10-Gig or 40-Gig connections depending on bandwidth needs.

"The beauty of our offering is that it's on the same link budget. If they want to start at 10-gig and dial it up to 40-gig, they can," Morin says.

Morin says Nortel's technology will also offer "significant cost savings" to Verizon by enabling the carrier to extend 40-gig services without requiring dispersion compensation modules.

Michael Bauer, Director of Core Planning and Engineering for Verizon Business in Europe, says "there are significant differences in the network cost structure." He points to savings from being able to cut down on the incremental cost of adding 10-gig circuits across the current network topology, as well as the ability to reduce the number of regeneration sites by using the latest ULH technology.

Bauer says the ability to potentially upgrade to 100-gig services also played into the decision. "Having a credible story for 40-gig and then onwards to 100-gig has been an important factor," he says.

Morin says the Nortel technology will allow Verizon to "go from 10-gig to 40-gig and 40-gig to 100-gig on the same sort of route. What we're using at 40-gig we can also use for 100-gig."

Finally, Bauer says that part of the decision comes from the fact that the OME 6500 is already in use in some of Verizon's metro markets in Europe. "We have been using it in metro space. Basically the box is known to the local operations staff and it is simplifying certain activities in terms of operation system," he says.

The news comes as a follow-up to an announcement Verizon made in September, in which the service provider said it would upgrade 20 percent of its European optical network with ultra-long-haul technology by the end of the year. (See VZ Goes Ultra Long-Haul.)

But Verizon didn't name the chosen vendor at that time, saying it could be one of its current three suppliers -- Alcatel-Lucent (NYSE: ALU), Nokia Networks , and Ciena Corp. (NYSE: CIEN) -- or another vendor.

That Nortel won over incumbent suppliers in the network could be significant, particularly as optical vendors jockey for a larger piece of Verizon's business. That's because Verizon and Verizon Business have RFPs out for converged optical + Ethernet platforms to be used in their networks. (See Verizon Preps God Box RFP and Verizon Biz Nears 'God Box' Choice.)

Because of opportunities like those, Nortel has transformed the OME 6500 from a typical transport device to a converged box. In June, Nortel announced that it was adding integrated reconfigurable optical add/drop multiplexing (ROADM) and Ethernet access capabilities to the OME 6500. (See Nortel's Noisy With Optical Opportunity.)

"From our point of view, we're responding to these opportunities, not just with Verizon. As the demand for Ethernet services or packet services increases, our converged platform fits really nicely into that sweet spot," Morin says.

— Ryan Lawler, Reporter, Light Reading