Ciena, British firm OK contract Cable & Wireless PLC to pay $16 million for network equipment


November 13, 1998|By Mark Ribbing | Mark Ribbing,SUN STAFF

Ciena Corp. said yesterday that it has won a $16 million contract to sell its network equipment to British telecommunications firm Cable & Wireless PLC.

Cable & Wireless had been using a Ciena product that allows fiber-optic lines to handle 16 times more phone calls and Internet messages than normal. Yesterday's deal calls for Ciena to provide equipment that would raise network capacity to 40 times normal levels.

The new Ciena equipment will be used in Cable & Wireless networks between Britain and the European mainland. Deployment of the gear is scheduled for early next year.

Ciena's stock rose 50 cents yesterday to close at $17.875.

The Cable & Wireless deal is the latest in a string of modest-sized contracts Ciena has won since the company's planned merger with Tellabs Inc. collapsed Sept. 14. On Sept. 22, Ciena announced a contract with Japan Telecom Co. worth less than $10 million. On Nov. 3, the firm unveiled a $23 million deal with Enron Corp. "It's one more piece of evidence showing that Ciena is very much in the game," said analyst Paul Silverstein of BancBoston Robertson Stephens in New York. Silverstein said Ciena's business with Cable & Wireless could be worth more than $30 million in revenue during the next 12 months.

The present contract marks a continuation of Ciena's efforts to build its presence on the other side of the Atlantic. "Europe has become a very important market for us," said Ciena spokesman Denny Bilter. "The growth in the European telecommunications market has gone much more rapidly than we expected this past year."

Like their American counterparts, European telecommunications firms are trying to cope with stiffer competition and an upsurge in communications traffic. Cable & Wireless spokesman Andrew McGrath said, "We are being faced with massively increased demand" for network capacity.

Pub Date: 11/13/98

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