Ciena builds its global business

Linthicum company gains contract to supply Internet company in Japan

February 23, 1999|By Mark Ribbing | Mark Ribbing,SUN STAFF

Ciena Corp. of Linthicum said yesterday that it has won a contract to supply its telecommunications equipment to a Japanese Internet company, Crosswave Communications Inc.

The deal marks the latest step in Ciena's effort to broaden and internationalize its customer base. The company had been reliant on two U.S. telephone companies -- Sprint Corp. and WorldCom Inc., now MCI WorldCom -- for nearly all of its business, and that narrow focus helped send Ciena into a financial dive last year.

In its bid to rebound, Ciena has landed contracts with other communications companies, including several deals with Japanese and European carriers.

Ciena said it has begun receiving orders under the Crosswave contract and that the contract has brought in about $20 million in sales.

"Even though this isn't a very large contract, it's positive in that it represents a further diversification of their customer base," said Mark Cavallone, an analyst with Standard & Poor's Corp.

Ciena makes network equipment that expands one fiber-optic channel into several, increasing the amount of communications traffic a fiber strand can handle. The equipment that Ciena is selling to Crosswave can expand one channel to 40.

On Wednesday, Ciena announced a deal to sell a British firm equipment that could expand one channel to 96. The equipment being sold to Crosswave is expandable to 96 channels, as well.

Andy Schopick of Nutmeg Securities Ltd. in Westport, Conn., said, "It certainly is encouraging that Ciena is having some success in expanding its customer base around the world and especially in Japan, where it's had a number of successes."

The Crosswave agreement builds on deals Ciena reached last year with Japanese communications companies Japan Telecom Co. and DDI Corp. Ciena opened a sales office in Beijing in September in anticipation of continued growth in its East Asia business.

Crosswave, based in Tokyo, was formed by Internet Initiative Japan, an Internet service provider, in partnership with Toyota Motor Corp. and Sony Corp. Cross-wave's fiber-optic network will begin service in Tokyo and some other urban areas in April and is anticipated to reach the whole of Japan by March 2000.

Daniel P. McCurdy, Ciena's vice president for corporate development, said the Crosswave deal is "another indication of continued success within Japan, which is a particularly difficult thing for American companies to achieve."

Ciena's stock inched up 12.5 cents yesterday to close at $22.5625.

Pub Date: 2/23/99

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