Lucent picked by Verizon

FRAMINGHAM (10/29/2003) - As expected, Lucent Technologies Inc. has been awarded a three-year deal by Verizon Communications Inc. to equip the carrier with next-generation SONET add/drop multiplexers.

Terms of the deal were not disclosed. Lucent is the second supplier announced for this build-out - Fujitsu Ltd. was awarded a piece of this contract in June.

Verizon will deploy Lucent's Metropolis DMX portfolio of metro optical networking products, and the LambdaUnite MultiService Switch for metro access traffic management. Metropolis DMX is an integrated SONET/Ethernet metro access multiplexer line that includes the DMX Access Multiplexer for central office and large enterprise applications; the DMXpress for customer premises applications; DMXtend for enterprise and loop access applications; and DMXplore to deliver next-generation SONET services to the customer's premises.

Lucent says the Verizon deal represents the first bundled sale of all four DMX products.

LambdaUnite bridges metro networks and high-speed optical core networks connecting cities to long-haul public networks. The product enables service providers to upgrade their networks to 40G bit/sec and deliver Gigabit Ethernet services, Lucent says.

LambdaUnite supports in-service upgrades from 160G to 320G bit/sec and 640G bit/sec, and mesh restoration capabilities.

Deployment of the Lucent products is currently underway, according to Lucent.

Analysts say Lucent beat out Cisco Systems Inc., Tellabs Inc. and Nortel Networks Corp. for this data-over-SONET piece of Verizon's next-gen optical build-out.

"This announcement indicates that Lucent is making some progress on more effective solutions selling," says Dave Dunphy, principal analyst for optical infrastructure at Current Analysis Inc. "Tellabs faces real competitive threats to its RBOC incumbency as RBOCs move to strengthen data capabilities. Cisco's strength in data is not as strong in the data-over-SONET arena as it is for router-based solutions, Ciena (Corp.)'s reign over optical switching faces competitive threats, and Nortel has yet to manage to break free from its lack of RBOC traction."

Verizon may not be done, however. The carrier says it will use several vendors in its next-gen metro SONET build-out, and UBS Warburg LLC expects Nortel to win the next piece, possibly by the end of the year.

Separately, Verizon this week posted third-quarter earnings of US$1.8 billion on revenue of $17.2 billion. Revenue was up 1 percent from the third quarter of 2002, but earnings were down significantly from the $4.4 billion recorded in last year's third quarter.

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