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18 June 2008


Infinera wins system order for Deutsche Telekom’s pan-European network

Infinera Corp of Sunnyvale, CA, USA, a manufacturer of digital optical network systems incorporating its own InP-based photonic integrated circuits, has won an RFQ (request for purchase) for a new DWDM system from Deutsche Telekom (DT), one of the world’s largest telecom carriers, to upgrade its pan-European network. The system’s digital optical network architecture, which uses large-scale InP-based photonic integrated circuits (PICs) combining the functions of dozens of discrete optical devices into a single pair of chips, will provide improved scalability, flexibility, and speed of service delivery.

As part of its global network, DT’s pan-European network spans almost 9000km and links Germany with most major European markets. For the backbone of the new network, DT’s order includes the ILS2 (Infinera Line System 2) system (launched at this week’s NXTcomm08 event in Las Vegas), which offers up to 160 DWDM (dense wavelength division multiplexing) channels at C-band wavelengths, extends optical reach to 2500km, and enables future capacity scalability up to 8Tb/s on a fiber. ILS2 works with Infinera’s current photonic integrated circuits (PICs), which put 100Gb/s of DWDM capacity on a pair of chips, and will be compatible with future-generation PICs, including the 400Gb/s PICs announced in February (for production in 2009).

“We selected the Infinera system to prepare for the next generation of international network operations and to help our customers to take advantage of this innovative and highly efficient solution with the most flexibility, quickest service provisioning and complete remote capabilities,” says Wolf Pueschner of global networks, Deutsche Telekom.

“This award makes clear that the benefits of PIC-based digital optical networks are powerful and realizable by carriers across the full range of geographies, markets, and applications,” claims CEO Jagdeep Singh.

*Infinera has reaffirmed its Q2/2008 guidance (given on 22 April) for revenues of $88-90m (expecting at least two new customers, not including DT). “Our expected Q2 results and the recently announced DT win demonstrate that Infinera continues to win in the DWDM marketplace,” says president and CEO Jagdeep Singh.

However, its initial preliminary revenue guidance for Q3 is for a drop to $75-80m. This is due to indications that the existing North American customer base will purchase less product than previously expected (related to the timing of new network builds at existing customers and the sales cycle with potential new customer wins, along with a product transition associated with Infinera’s new ILS2 system). Hence Infinera has lowered its outlook for full-year 2008 year-on-year revenue growth on 2007’s $309.3m from 25% (to about $386m) to about 10% (to $340m). “While the preliminary outlook for our fiscal third quarter is lower than anticipated, we do not believe we have lost any existing customers, we do not believe that we have yielded any market share, and we are confident we will continue to add new customers during the rest of the year,” says Singh. The win with Deutsche Telekom and ongoing engagements with other leading carriers worldwide give the firm continued confidence in the strength of its long-term strategy and growth outlook, he adds.

As a result of the initial deployment of the DTN system with DT, Infinera expects to incur one-time charges of about $4m in Q2-Q3/2008. Infinera will announce full Q2 results on 22 July.

See related items:

Infinera introduces passive PICs in new optical line system

Infinera targets PIC capacity of 4Tb/s within 10 years

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