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JDSU CEO Sees Wireless Test Boom

Carol Wilson
6/30/2010

Continuing its efforts to become a major force in communications testing, JDSU (Nasdaq: JDSU; Toronto: JDU) is showing off a new focus on wireless and LTE, buttressed by its acquisition of the Agilent Technologies Inc. (NYSE: A) Network Solutions Division (NSD) testing business. (See JDSU Closes Agilent Deal.)

Just as importantly for its wireless market hopes, JDSU hopes to use its Carrier Ethernet testing expertise in the booming wireless backhaul market.

"Backhaul is a pinch point for network operators," said JDSU president and CEO Thomas Waechter, in an interview this week. "We provide a number of services to help get Ethernet backhaul in place, built on our strong knowledge around carrier- grade Ethernet." (See JDSU Adds to 100GE Test Suite.)

Test gear plays a significant role in the planning, installation, and monitoring of Ethernet backhaul networks, and the data they generate becomes more critical to network operators as the boom in mobile data is changing traffic patterns, eliminating what used to be traditional downtime for network operators.

The pressure is on to more closely monitor the networks and be proactive in responding to problems, Waechter says, because network operators can't afford to roll trucks in response to congestion or outage issues.

"We can help them keep the network optimized as demand patterns change," he says.

The Agilent NSD buy gave JDSU a foothold in the new world of Long Term Evolution (LTE) testing, which involves the move to an all-IP infrastructure, posing new test challenges. JDSU today announced it had been able to validate results from rapidly changing test scenarios during major LTE interoperability trials involving Vodafone Germany and China Mobile Ltd. (NYSE: CHL) earlier this year. (See JDSU Touts LTE Test Expertise.)

"We are early to this, and we are sending our equipment into labs for network operators and equipment manufacturers," Waechter says. "We are right on the forefront."

He believes JDSU is in a position to combine its traditional knowledge of wireline operations with this wireless expertise as the two networks come together to try to support the new mobile service world.

"We are adding service solutions, as well as equipment," Waechter says. "The convergence of networks is becoming more complicated on both sides." (See JDSU Intros LTE Testing Service.)

Waechter sees JDSU playing more of an advisory role, sharing information that will enable service providers to try to stay ahead of the demand curve and build networks faster and for greater future efficiency.

That's also where JDSU's optical components expertise comes into play. The company can apply its ROADMs and tunable SDX capabilities and its AON Super Transport Blade -- a new single-slot product that integrates major optical network transport functions onto a single blade, instead of using three -- to enable a more efficient network build.

"We can look at statistics and where demands are going to be in the network," Waechter says. "We can help network operators be agile."

Other hot areas include video, where JDSU is making a major foray into video-quality assessment, and providing the ability to collect and correlate data generated by policy appliances to generate what Waechter calls "user-friendly" network analysis in a graphical user interface format network operators can use efficiently.

The good news is the current demand drivers are here for the long term and will have global impact, leading JDSU to expect consistent growth going forward.

"We can see where networks are headed, and it puts more pressure on network operators to be more efficient, to bring down the cost of capital and also of opex -- we actually see more focus on controlling operating expenses by preventing truck rolls and doing remote diagnosis," Waechter says.

JDSU isn't just banking on communications testing for its growth; the company is also diversified into advanced optical technologies being used for things like pigments in printing, holograms, and brand protection. One of its growth markets is the anti-counterfeiting technology being used on the new $100 bill -- and with Uncle Sam printing more money than usual these days, that's cash in bank for JDSU.

— Carol Wilson, Chief Editor, Events, Light Reading

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