With $2.1 billion, company beefs up IP-routing expertise as it tries to help phone companies offer services like IPTV.
The carrier will use their equipment to boost DSL speeds and one day serve video into homes.
Eight months after it emerged from bankruptcy, Redback Networks is racking up new contracts.
Redback Newtorks emerged from bankruptcy earlier this year and is winning new deals left and right.
The networking equipment company emerges from bankruptcy protection and completes a financial restructuring, eliminating $467 million worth of debt.
The network gear maker could report its first-ever profitable quarter next year, CEO Kevin DeNuccio says, thanks to a Chapter 11 bankruptcy plan that erases $467 million in debt.
Nortel Networks will license patents to telephone equipment supplier Redback Networks as part of a settlement that ends a patent dispute between the two telephone industry rivals.
The company introduces an upgrade to its SMS 10000 networking equipment, but analysts say it will need more than that to turn its outlook around.
The phone maker plans to take a 10 percent stake in the struggling communications-equipment maker for $35.8 million, hoping to broaden its international customer base.
Redback Networks on Monday unveiled souped-up Internet gear to compete against Juniper Networks and Cisco Systems. Redback designed its SmartEdge 800 router to handle Internet traffic from businesses within metropolitan areas with the intention of taking market share from Juniper's M-20 router and Cisco's 12410 and 10008. Redback's offering will help support business services like storage and VPNs (Virtual Private Networks) as well as traffic routing. The company also makes DSL (digital subscriber line) equipment, a market that has boomed in the past, but will probably grow less quickly, according to industry analysts. The business data market represents a strong growth opportunity for Redback and gear makers since ISPs (Internet service providers) look to constantly upgrade their networks with equipment as Internet traffic keeps steadily increasing.