Big contract boosts Ciena shares $8

Linthicum company signs pact with GTS worth $100 million

Telecommunications

March 17, 2000|By Mark Ribbing | Mark Ribbing,SUN STAFF

Ciena Corp. said yesterday that it has won a contract to sell as much as $100 million in telecommunications equipment to Global TeleSystems Group Inc. (GTS), an Arlington, Va., company with an extensive European telephone and Internet network.

The Ciena gear, which increases the amount of traffic such networks can handle, will be used to help expand the capacity of GTS' network in Western Europe.

GTS had been using Ciena gear that could increase a network's capacity 40-fold; the new contract is for equipment that could bring a 96-fold boost.

The deal marks another step in Ciena's globalization strategy. The Linthicum company has landed contracts in Europe and Japan during the past year in an effort to broaden its once-tiny client base.

Aaron Graham, Ciena spokesman, said the GTS agreement is "a particularly large deployment" in terms of the miles covered. Ciena's shares gained $8.1719 yesterday, closing at $133.48.

David Toung, an analyst with Argus Research Corp. in New York, said the GTS sale could be important to Ciena over time. "I think it's very positive for them," Toung said. "It shows that the emerging carriers like Ciena's technology."

Robert Capozzi, a GTS spokesman, said adding more network capacity has become a necessity: "The demands in terms of traffic have exceeded even our own plans."

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