Tellabs aims to balance cuts with investments

2013-02-25 10:30:52


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First Carrier Ethernet 2.0 certified equipment announced
The Metro Ethernet Forum (MEF) announced Tuesday, January 29 that it has awarded the first Carrier Ethernet 2.0 certifications to 20 companies. Certified products include a variety of optical transport equipment.As its name implies, Carrier Ethernet 2.0 represents the second generation of the MEF’s Carrier Ethernet specifications. The new regime includes the addition of support for multiple classes of service, greater manageability and easier interconnect for eight standard service types, and more efficient mobile backhaul. Both products and services can receive certification (see "MEF launches Carrier Ethernet 2.0 certification program").The first 20 companies to have products certified as Carrier Ethernet 2.0 compliant include:Accedian  Altera   BTI Systems  Ciena (six services each on its 3916 and 3930 Service Delivery Switches and its 5150 Service Aggregation Switch)  Cisco Cyan  FibroLAN  Huawei Infinera Juniper Networks  MRV (OptiSwitch 906G and OptiSwitch 940 10GbE Carrier Ethernet Demarcation series)  Omnitron (iConverter Network Interface Devices)  Overture (the Overture 1400, 4800, and 4000) PT Inovacao
Pulsecom  RAD Data Communications (the ETX-5300A Ethernet Service Aggregation Platform, ETX-205A Advanced Carrier Ethernet/Mobile Demarcation Device and ETX-203AX Carrier Ethernet Demarcation Device)  Telco Systems (the T-Marc and T-Metro product lines) Tellabs (the Tellabs 7100 Optical Transport System and the Tellabs 7300 Metro Ethernet Switch series)Transition Networks Transmode (Native Packet Optical 2.0 hitecture).“CE 2.0 is a difficult accreditation to achieve,” according to Bob Mandeville, president and founder of test lab Iometrix, which is responsible for MEF’s certification testing process. “To be recognized as CE 2.0 certified, each company must pass a suite that totals 634 stringent tests. Over 155 companies are now certified for CE 1.0 and the adoption signs for 2.0 are exciting. The demand for certified products and services is a driving force, and we expect a significant increase in service provider certifications not only from established markets, but also from developing economies in 2013.”“The companies’ achievements are are a testament to their commitment to outstanding delivery for the Carrier market” said Ihab Tarazi, the MEF’s chairman of the board and Verizon’s vice president of global network planning. “Certification will enable service providers to choose equipment vendors with greater speed, clarity and certainty. CE 2.0 Certification marks a significant moment in the life of the MEF and Carrier Ethernet.”Sycamore Networks Solutions begins new chapter Public company Sycamore Networks has now officially become privately held Sycamore Network Solutions Inc. after the company’s stockholders approved the sale of its Intelligent Bandwidth Management Business to a portfolio company of Marlin Equity Partners. Approval of the deal, announced last October (see “Sycamore Networks shutting down, sells optical business for $18.75M”), came during a special meeting of shareholders January 31.Marlin Equity partners agreed to pay $18.75 million in cash (subject to a working capital adjustment) for the assets and assume “certain related liabilities.” John Scully, previously Sycamore’s vice president of worldwide sales and support, will lead the new company as president and chief executive officer. The Intelligent Bandwidth Management Business primarily focused on the sale of large-scale optical switches.“Sycamore’s carrier-class networking solutions form the critical foundation for many of the world’s leading communications networks, and we believe the company is well positioned to deliver enhanced value to its global customers as it moves forward,” said Pat DiPietro, operating partner at Marlin. “We are pleased to appoint John to the role of president and CEO, and we are committed to providing the strategic guidance and financial resources necessary to ensure the company’s success as it enters a new phase of growth and innovation.”“I am extremely honored to lead a dedicated organization with a proven track record of technology innovation and an unwavering commitment to excellence in customer service and support,” added Scully. “We are very excited about the opportunities we see ahead of us, and look forward to strengthening our relationships with current and prospective customers as we expand the features and capabilities of our solutions portfolio.”One potential avenue of such an expansion could come when Marlin Equity Partners closes another deal, the acquisition of the optical network systems business of Nokia Siemens Networks (see “Nokia Siemens Networks to sell optical network hardware business to Marlin Equity Partners”).“We are making a major commitment to this sector, and have significant capital under management that we intend to use as a catalyst for consolidation,” said Nick Kaiser, a co-founder and partner at Marlin Equity Partners, via a press release when the pending acquisition was announced.Sycamore Networks Solutions Vice President of Corporate Marketing Scott Larson told Lightwave he could not comment on this possibility, citing that it is Marlin’s policy to decline to discuss deals that have not yet completed.Meanwhile, what’s left of the original Sycamore Networks will proceed to liquidate the rest of its assets and dissolve the company. The timing of the dissolution is not yet certain, Sycamore management said.
Tellabs aims to balance cuts with investments
Tellabs announced that it will discontinue its 9200 Series IP edge routing platform and lay off approximately 300 employees. However, it also plans to invest in its remaining product lines, particularly optical transport.The company made the announcements upon the release of its fourth quarter and year-end results. For the quarter, Tellabs saw revenues decline of $242 million, a steep decline from the $317 million it earned in the same quarter a year ago. On a GAAP basis, the revenue declines helped lead to a net loss of $23 million ($0.06 per share) in the quarter versus a net loss of $5 million ($0.01 per share) in the fourth quarter of 2011.For the year, Tellabs accrued revenues was $1.053 billion, a drop from the $1.286 billion it enjoyed in 2011. The company lost $172 million ($0.47 per share) for the year on a GAAP basis – better than the $188 million ($0.52 per share) the previous year.The company’s performance required action, according to Dan Kelly, Tellabs CEO and president. “Over the last quarter, Tellabs initiated a review of its strategy, product portfolio and cost structure,” Kelly said via a press release. “Based upon our analysis of ROI [return on investment], customer needs, and market conditions, we are discontinuing development of the Tellabs 9200. We will reduce our expenses, which will affect about 300 people during 2013.Tellabs introduced the 9200 in September 2011. An article in a Tellabs house magazine touted Telstra as a customer who planned to deploy the platform in 2012.While discontinuing the 9200 (which will require a restructuring charge of $38 million, mostly in the first quarter of 2013) will decrease spending on products within its Data business overall, Tellabs will continue to invest in new features for the remaining systems in the Data portfolio, the 8600 and 8800. For example, the company will demonstrate a new “self-optimizing networks” feature and discuss software-defined networking (SDN) capabilities for both its data and optical platforms at this month’s Mobile World Congress.Meanwhile, Kelly told participants in an analyst call last week that Tellabs will increase R&D spending on optical products “modestly.” Areas of spending include colorless and directionless ROADM capabilities and extending Optical Transport Network (OTN) features to edge platforms. The company also has begun to ship 100-Gbps modules for the Tellabs 7300 Ethernet switch and has a higher-capacity shelf in the works that will lay the foundation for 400-Gbps support. Kelly added that the SDN concepts discussed at Mobile World Congress will lead to demonstrations of SDN capabilities for the Tellabs 7100 to customers over the first half of this year.The company won 19 new customers for its optical transport products in 2012, Kelly added.In the access arena, Tellabs also will increase R&D spending in a modest fashion, Kelly promised the analysts. The company won 10 new access product customers in 2012.Looking more near term, Kelly and the rest of Tellabs management project 1Q13 revenues will range from $205 million to $220 million. Things should pick up during the rest of 2013, the executives believe, with both revenues and non-GAAP gross margin increasing as the year goes by. They also expect non-GAAP operating expenses to decrease to a target quarterly run-rate of $75 million in the second half of the year.
SHF selects Southern Photonics’ OMA to validate optical transmitter performance
SHF Communications Technologies AG, a manufacturer of high-end bit error rate test and optical transmitter systems, has selected Southern Photonics’ IQScope optical modulation analyzer (OMA) to aid in the development and validation of their high-performance optical signal transmitter systems.“We’ve explored and tested various OMA systems on the market, and only Southern Photonics IQScope offered the perfect mix of high bandwidth and flexibility,” said Dr. Thomas Lee, technology advisor at SHF. “With the IQScope, we are now able to accurately characterize bandwidth demanding modulation formats such as 28-GBaud/s RZ-16QAM, while utilizing our existing oscilloscope inventories.”SHF develops and manufactures high-end RF electronic components and testing instruments such as bit error rate testers (BERTs) and optical transmitters and receivers. Previously, SHF has been relying on direct detection measurements to validate the performance of their optical transmitters, but the evolution of data modulation formats to complex schemes such as quadrature phase-shift keying (QPSK) and quadrature amplitude modulation (QAM) meant that customers are demanding more in-depth quality metrics such as error vector magnitude (EVM), which direct detection techniques cannot provide.The Southern Photonics IQScope is an add-on OMA coherent receiver and works with widely deployed equivalent-time oscilloscopes to bring what Southern Photonics asserts is a unique set of advantages such as high bandwidth, finer granularity of measurement, and a lower noise floor (see "Southern Photonics launches optical modulation analyzer aimed at R&D").
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