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Networking start-up strikes $350 million deal

Optical networking start-up Tellium will supply equipment to Cable & Wireless, the company's second large contract with a telecommunications company.

Optical networking start-up Tellium struck a $350 million deal this week to supply equipment to Cable & Wireless, the company's second large contract with a telecommunications company.

The contract calls for Cable & Wireless to purchase a "minimum" of $350 million worth of equipment during the next five years, according to the companies.

Tellium will sell Cable & Wireless its recently introduced Aurora Optical Switch and related technologies as part of the deal. Cable & Wireless plans to launch Tellium's gear starting in the first quarter of next year.

The Oceanport, N.J.-based company is one among several start-up high-end networking companies attempting to spur interest from telecommunications customers for their optical networking equipment.

Tellium announced a $250 million deal with Extant last fall. Extant subsequently began launching the equipment in April of this year as part of a 50-city network construction project scheduled for completion next year.

"This was a competitive process, and we're delighted to say we won," said Tellium chief executive Harry Carr. "We are currently competing for additional business."

Some start-ups have included access to potentially lucrative stock as part of equipment deals with network operators. But Carr claims Tellium made no such deal to secure Cable & Wireless' business, though he did not rule out the use of stock warrants with future customers.