BT buys Ciena’s PBT access gear

Ciena today claimed its first sale to a major carrier of products based on Provider Backbone Technology (PBT) as sales of metro optical equipment overall boosted the company’s quarterly revenue beyond expectations.

Ciena announced today having won a contract to supply British Telecom’s 21^st Century next-generation network initiative with its CN 3000 family of Ethernet access gear, which is based on equipment from Anda Networks. Anda announced in May the addition of PBT support to its Ethernet access gear, which bonds copper and fiber lines including T-1s and E-1s to deliver carrier Ethernet services.

Ciena was one of a slew of vendors to promise support for PBT on its roadmap earlier this year following Nortel Networks’ championing the layer-two tunneling technology, largely with BT’s help. Ciena already supplies BT, one of its biggest customers, with long-haul and metro optical gear for the 21CN rollout.

“We have talked about PBT products in our product family,” said Tom Mock, Ciena’s senior vice president of strategic planning. “We typically don’t talk about that sort of thing in our product line until we’ve gotten a customer win for it. That’s why you’re seeing this turn up at the time it’s turned up.”

Ciena isn’t saying exactly which products BT will deploy. Because the deal announced today is for access gear, it may not include as much PBT functionality as BT’s metro equipment. “The things we do to support BT will have a PBT content and a PBT flavor,” Mock said. “The amount of PBT content in any particular product gets higher as you get closer to the core of the network and include more switching functionality. To the extent that PBT is relevant in these particular applications, that’s absolutely something we’re doing. To the extent that this is interoperating with a PBT network, it contains all of the attributes that are required to make that happen.”

“The important concept here is one of connection-oriented Ethernet,” he added. “That can be done with either T-MPLS or PBT, and which one gets chosen is probably dependent on what the network you currently have in place is. Clearly since BT is a big customer of ours, PBT is a near-term focus of ours.”

On the company’s fiscal fourth-quarter conference call today, Gary Smith, Ciena’s chief executive officer, said he expected BT to deploy its Ethernet access gear in the second half of 2008 and accelerate deployment in 2009.

Meanwhile, sales of Ciena’s 4200 metro optical platform continued their upward climb in the vendor’s fiscal third quarter, helping Ciena beat analysts’ overall revenue expectations.

Sales of the 4200 jumped 70% sequentially to $39 million in the quarter, contributing 18% of the company’s total quarterly revenue. That follows another high-flying quarter, in which 4200 sales were up 15% sequentially and more than double their year-ago level to represent more than 11% of total revenue.

Smith pointed out that those sales levels are consistent with the company’s long-term expectations but came later than originally anticipated. “It took longer than we thought to get there because of revenue recognition,” he said, adding that enterprise customers are starting to contribute more to those sales. “We’re seeing particularly the 4200 family begin to do very well in some of these enterprises,” he said. “We’ve won about 80 odd new customers in the year on the enterprise side.”

The vendor predicted 20% revenue growth for its next fiscal year, though some analysts called that number “conservative.”