Nortel is one of several players in the high-end networking market that has introduced new plans to increase the speed of equipment for long distance networks. Other firms, such as Ciena, Lucent, and Tellabs, plan to increase equipment capacity to handle more voice and Internet traffic.
Companies have been making deals--and paying high prices--for firms that will help round out their technologies. Cisco Systems, an Internet-focused company with few fiber-optic skills, recently plucked nascent optical gear makers Cerent and Monterey Networks for $7.4 billion in stock.
Nortel is seeking to marry its optical expertise to the technology it acquired from Bay Networks last year, a competitor of Cisco's in the data equipment market.
Nortel unveiled plans today to increase the capacity of its networking technology. In part, the announcement offers further details into how the company will market new networking advances first unveiled earlier this year. The technology is said to offer 640 times the capacity of existing fiber-optic lines.
Nortel's strength has classically been in equipment that handles voice calls over phone networks. But with the growth of the Internet and its networks, the company has shifted its emphasis to take advantage of the trend toward combined voice and data network layouts.
Nortel plans to push its upcoming Optera 1600 line of equipment, with the faster upgrades, in field trials with communications carriers in the fourth quarter of this year.
New additions to the company's technology roster include the Optera Packet Core, a new switch scheduled to enter tests in the third quarter of next year. Nortel also unveiled the Verselar Switch Router 25000, due to ship in the fourth quarter of this year, and a digital cross-connect system to tie older network systems to new Internet-based technologies.
Nortel executives are pitching the product lineup as a way to increase available bandwidth on service providers' networks and rid complex systems of typically slow response times.
Though much of the technology has yet to ship, Nortel executives said communications companies are interested in future technologies now. "Customers are planning their networks," said Clarence Chandran, vice president of carrier packet solutions at Nortel.
Fiber-optic technology is used to shuttle long distance calls and, increasingly, Internet traffic, throughout networks all over the world. Fiber-optic links can be expanded using a technology called dense wave division multiplexing (DWDM) which multiplies the amount of connections possible over a single fiber-optic strand.
Nortel may include its new technology in routing gear aimed to fill the high-end needs of service providers. Rivals such as Cisco and Lucent have already either developed or acquired such technology, leaving Nortel without its own comparative offering. Start-ups like Juniper Networks have also benefited from demand for such network equipment.
The company previously had a development and marketing relationship with Avici Systems, but that was ended in June once Avici realized it could increase its market value if it severed ties with Nortel.