Corvis gets Qwest pact for optics

Columbia company's long-term contract valued in millions

An all-optical network

Md. firm's comment on latest deal limited with IPO pending


June 07, 2000|By Amanda J. Crawford | Amanda J. Crawford,SUN STAFF

Corvis Corp. of Columbia said yesterday that it signed an agreement with Qwest Communications to provide the Denver-based broadband Internet services provider with equipment for its new, all-optical network.

Terms of the multiyear, multimillion-dollar agreement were not disclosed. But the deal is expected to give an added boost to Corvis. Started by Ciena Corp. founder David Huber in 1997, the company filed for an initial public offering last month.

The pact with Qwest Communications International Inc. follows similar agreements with Broadwing Inc. and Williams Communications Inc. announced in March and April, each worth $200 million.

Corvis executives and analysts declined to comment on the Qwest deal, noting Securities and Exchange Commission quiet-period rules preceding a stock offering.

"Qwest's commitment to using Corvis validates our all-optical technology," Huber said in a statement.

Corvis is the only company to offer all-optical transmission and switching equipment, which it claims can move data over long-distance networks more efficiently.

Qwest will use technology from Corvis, along with Ciena and Nortel Networks Corp., to convert its 25,500-mile North American fiber-optic network to an all-optical network.

The upgraded network, which is to be completed in the beginning of next year, will allow Qwest to offer faster and more efficient service that could cost customers less, the company said.

"It provides an ultra-long-haul technology," Qwest spokeswoman Jane Morrissey said. "It brings all sorts of cost and network efficiencies."

The upgrade will quadruple network capacity, reduce operating costs by up to 70 percent and allow Qwest to activate network services for clients up to 95 percent faster, Morrissey said.

Analysts expect the market for optical equipment like that which Corvis provides to grow to $14 billion by 2003. Investors, banking on that growth, funneled more than $300 million in venture capital into Corvis last year, making it one of the leading fund-raisers in the country.

Corvis also recently announced an agreement to purchase Algety Telecom of France, which makes ultra-high-speed fiber-optic equipment. Terms were not disclosed.

In its IPO filing, Corvis said it hoped to raise $400 million. The company also reported that it does not yet have any revenue and posted a $27 million loss for the three-month period ending April 1.

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