Earlier this year, I wrote a column for CNN Money pointing out that the telecom downturn was nearing an end, and we could see small uptick in the cap-ex. The explosion in online video and the emergence of next generation wireless services is prompting an uptick in demand for bandwidth is forcing carriers to either light-up their networks, or upgrade their networks. Ironic as it might be, but every little bit helps. Take today’s big news – Apple offering full length movie downloads from its iTunes store. Those gigantic files are going to eat up a lot of bandwidth. (Full analysis of that bit of news is coming up soon!)
One of the biggest beneficiaries of this spending boom is Silicon Valley start-up, Infinera. A likely IPO candidate, the company today added Broadwing to a growing roster of its customers. The company will supply gear for a major upgrade to the 20,000 route mile Broadwing network. As part of the deal, the company gets the intellectual property of Corvis, a remnant of an earlier bubble. Infinera is going to maintain the older Corvis gear, and the company has no plans to revive the Corvis product line.
But there could be some uses for the Corvis technology, according to Scott Clavenna, chief analyst with Heavy Reading. Infinera has licensed Corvis’ Raman amplificiation technology from Broadwing, and this will allow for longer links on that optical network. “I could see that adding some Raman to Infinera gets them longer spans with fewer intermediate inline EDFA [erbium-doped fiber amplifier] sites, which can reduce network cost,” Clavenna, tells Light Reading.
“The bandwidth demand has been growing annually between 80-to-100% since 1999,” says Dave Welch, chief strategy officer and one of the three co-founders of Infinera (Jagdeep Singh and Drew Perkins are the other two members of the founding team.) He doesn’t see that trend ending anytime soon. “What you saw was a gap between bandwidth demand and the demand for gear.” That is getting normalized and its reflected in Infinera’s sales, which are estimated to be over $100 million for the year.