Tellium Scores Another Big Win

Optical switch-making upstart Tellium,
Inc.
is making next-generation fiber-optic networking a reality at the speed of light.

The privately held switching solutions provider struck its third major deal
to provide a prime player with the ingredients necessary to construct an
all optical broadband network.

Qwest Communications International Inc.
Wednesday announced it had sealed a multi-million dollar, multi-year
strategic agreement with Tellium to support the deployment of its network
built on glass.

Under the agreement, Qwest has agreed to purchase Tellium’s
optical switching equipment. Founded in 1997 by optical experts from
Bellcore, Tellium’s optical switches will be deployed at the heart of
Qwest’s all optical network initiative.

Qwest also received certain rights to purchase an ownership stake in
Tellium as a part of the deal with the fast-rising equipment firm.

Mike Perusse, Qwest senior vice president of engineering and technology,
said the telecom company chose Tellium based on the port-density and
high-level of scalability of its optical networking products.

“We believe Tellium is a partner that can keep up with Qwest’s leading-edge
optical network,” Perusse said. “By integrating Tellium’s core switching
platform into Qwest’s global broadband Internet network, we gain network
efficiencies and additional resources to provide broadband Internet
applications and services with greater performance and reliability.”

Harry Carr, Tellium chief executive officer, said the deal was a
competitive process and that the firm is delighted to say, “we won.”

Carr added that Tellium is actively and aggressively competing for
additional business.

Tellium’s new Aurora Optical Switch was ready for shipping to high-capacity
carriers the first week of this month. The scalable optical switch
reportedly delivers 1.28 terabits of capacity with interfaces that range
from OC-48 up to an incredible OC-768. The new switch offers a 16-fold
increase in capacity over the company’s previous model.

In other words, Tellium’s latest technology can send larger amounts of data
at once and at higher speeds. Because the switch also doubles the density
of the equipment, space-constrained communications companies are freed to
aggressively outbuild optic networks.

The Aurora line-up faces head-on competition with similar technology from
the likes of
Sycamore Networks, Inc.
, Ciena Corp. , and
market leader Cisco Systems, Inc.
. Others high-speed companies including Nortel Networks Corp. and Lucent Technologies, Inc.
are working feverishly to develop similar equipment.

Tellium stands firm because it is first to market with an optic solution
that supports 512 OC-48 connections in its initial configuration. The
switch, coupled with its StarNet Operating System and Wavelength Management
System provides customers with a migration path from Tellium’s current
family of Aurora intelligent optical switches to scale up in port counts,
bit rates per port, and raw capacity.

Tellium’s technology that combines an all-optical bypass switching system
with electronic control and processing quickly caught the attention of Cable and Wireless Group ,
which on Sept. 12 struck a five-year $350-million deal with Tellium.

The Ocean Port, NJ-based company already had an existing $250 million
equipment contract since last fall to supply its high-speed technology to
Extant, Inc., a network operator
recently acquired by Dynegy, Inc.
. Extant subsequently began launching the equipment in
April of this year as part of a 50-city network construction project
scheduled for completion next year.

Tellium is in the process of developing another new switch dubbed the
Aurora Full Spectrum, which is scheduled to ship sometime next year. It
reports that the next breed of Aurora switches combines optical technology
with more pervasive electrical technology, allowing network operators to
choose between the two methods of transporting data.

Even though electronics slows down data traffic flow, it also allows
networks to add more sophisticated management techniques. Developing such a
switch will surely not slow down Trillium’s market ascent.

Dr. John Ryan, RHK Inc. chief analyst at
the telecom research firm, said the Qwest deal adds to Tellium’s current
momentum.

“This is the company’s second major customer win announced in the past two
weeks,” Ryan said. “Tellium is carving out a strong position for its core
optical switching products, as service providers get ready to meet the
network demands of the decade of traffic growth ahead.”

Tellium is considered ripe to go public and make an initial stock offering,
particularly after the recent success of rival optical networking company
Corvis Corp. ,
whose stock jumped 135 percent when it went public in July.

But Tellium declined to comment on any plans to go public at this time.

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