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Raising the optical bar

Gary Smith, President and CEO, CienaWhat sort of potential do you see in the Middle East and Africa market?

We got our first couple of customers in the region, and we are looking to expand our geographical footprint by branching out to Saudi Arabia and rest of the region. There is a tremendous growth in broadband, mobile and other services in this region. From my dialogue with the major carriers here, they are all looking to step over legacy type infrastructure and next-gen architecture. The problem with some parts of the rest of the world is that networks were built for voice, which is now carrying data and voice. It is difficult for them to migrate their networks, while the carriers here are being innovative with their networks today.

Some of the carriers here have taken an early dive into 4G. Is Ciena involved any of these projects?

We are helping to facilitate a number of those projects. All the 4G technologies such as LTE and WiMax need to be terrestrialised. The critical issue is how do you deal with all that bandwidth. We are focused on Carrier Optical Ethernet, which is really a very efficient way of switching around that traffic. When you have got that kind of traffic, you need to be flexible how you architect your networks and manage it.

When do you plan to close the Nortel unit acquisition? Is there any product overlap?

We are on track to close it on the first quarter of the calendar year. Having looked at other integrations of the similar nature, I think one of the lessons learned is move quickly, with clarity. We are looking to do that, and work on the portfolio. We are fortunate that it is a very good fit with very little overlap, and bother companies are focused on innovation and quality.

The long haul market is on the decline. Is that the reason Ciena is eyeing the metro market now?

Those two used to be well segmented, but the line is blurring now with convergence and all. Nortel has been strong in the long haul and Ciena in metro switching and Carrier Ethernet. Nortel is the world leader in 40G and 100G. We are bullish about the potential of Carrier Ethernet because the challenge from telecom service providers’ point of view is how can they scale up and de-cost the networks. In this context, the combination of optical layer and layer 2 is a very low cost proposition. Ethernet is coming of age in terms of carrier infrastructure. We have spent lot of money on researching and developing to make Ethernet carrier class.

What is Ciena’s value proposition?

We bring in value when you talk about convergence and service creation, as we are the leading player in optical switching. We had our first ever optical switch in 2001. We continue to develop unique set of assets in technologies as the only player focused on converged optical Ethernet.

When do you expect 40G and 100G to mainstream?

40G is already happening, and some of the carriers, including the ones in this region, are looking to go beyond that. Recently, Ciena has announced the first 100G live traffic in New York Stock Exchange and Nortel has announced Verizon in Europe. The current traffic demands should see massive adoption in the next 18 months.

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