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Optical/IP

Transmode Bucks Growth Trend

BRUSSELS -- Broadband World Forum Europe 2008 -- Economic gloom and doom may be prevailing in the wider world, and other vendors might be finding the going tough, but at Swedish optical equipment firm Transmode Systems AB it's all smiles -- at least for the time being.

CEO Karl Thedéen says the company's strategy of focusing on Tier-2 carriers, cable operators, large enterprises, and municipalities has been paying off, as Transmode is now on course to report a 30 percent increase in revenues for 2008, or €65 million ($92 million) compared with €50 million ($71 million) in 2007. (See ntl:Telewest Does Backhaul, Sonofon Deploys Transmode , Transmode Wins in Germany, and Transmode Ramps in 2007.)

Thedéen also claims the company is in its eighth consecutive quarter of profitability and heading for more.

That's more financial detail than most private companies give out, but Thedéen is preparing himself to run a public company. Transmode has been working towards an IPO for a while, but now isn't the right time to be offering up stock on the public exchanges.

"The target is still to go public on the Stockholm exchange, and we are set up for that, so we are practicing at being a public company. We are ready for when the market comes back," he says.

In the meantime, the company has turned its attention to Europe's Tier-1 carriers, where Thedéen says there is a lot of demand for the sort of metro WDM gear Transmode is peddling. "There are a lot of RFPs out there at the moment that are for straightforward Layer-1 transport."

The driver for those optical transport needs are -- you guessed it -- growing volumes of broadband traffic and the need to backhaul mobile traffic from local aggregation points that take traffic from multiple base stations. "These are the pain points for carriers" as data volumes ramp, notes the CEO.

Thedéen even claims to have signed up a Tier-1 European operator as a customer, though of course he can't name the operator at present.

In addition to the larger European players, Transmode also has ambitions in Asia/Pacific and the U.S., where there is "growing demand in the metro core." Covering those markets is a stretch for a small company though, so Transmode is working with local integrators and is even now talking with some of the Tier-1 vendors about potential resale partnerships, says Thedéen. (See Fiberail Expands With Transmode.)

— Ray Le Maistre, International News Editor, Light Reading

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