Corvis hopes new undersea gear buoys sales

The optical hardware maker plans to introduce two new products allowing communications carriers to build regional networks and short undersea connections.

2 min read
Optical hardware maker Corvis announced Wednesday that it plans to introduce two new products allowing communications carriers to build regional networks and short undersea connections.

The gear marks a new push for the company, which is known primarily for its long-range fiber-optic equipment designed for nationwide networks, and could help alleviate concerns about Corvis' limited customer base.

Some analysts believe the gear is similar to Corvis' current products and was relatively easy to recast for a different market.

"It probably was a good extension of their existing development efforts," said Shin Umeda, an optical-industry analyst at The Dell'Oro Group, a networking research and consulting firm. "They probably didn't have to do a lot of new engineering development to introduce these products."

Corvis will introduce during the second quarter the CorWave XL and CorWave XF hardware. The new products are designed to link islands to one another or to the mainland--an England-Ireland network connection, for example, or many of the Southeast Asian island nations, or other regional network needs.

The new equipment can carry traffic farther than earlier technologies, without the need to regenerate, or boost, the signal, making it ideal for short-range undersea needs. Corvis' new gear can carry traffic about 350 kilometers, roughly 220 miles, without the need for re-amplification of a signal.

Major long-haul carriers such as Williams Communications, Broadwing and Qwest Communications International use Corvis' original gear. But the company's stock has suffered over the past year as investors fretted about Corvis' limited customer base and rumors that the company might lose an existing customer at a time when Corvis only had three. The new gear is targeted at a new breed of customers--smaller regional players--and is expected to be popular in Europe, executives said.

"This allows us to reach a new set of customers," said Shyam Jha, vice president of marketing at Corvis. "Until now, we were selling to people building very large long-haul networks. This is an extension of our strategy."

Corvis believes its new technology will reduce costs for carriers by cutting the need for frequent re-amplification of the Internet or voice traffic. The gear may be particularly attractive to smaller carriers because it will reduce the need to lease co-location space--the secure communications closet facilities in which many carriers cooperatively house their gear--from competitors, executives said. As a result, smaller carriers may be able to build their regional networks faster and at lower costs, Jha said.

Corvis competitor Ciena on Wednesday signed a $200 million equipment contract with McLeodUSA. Many similar optical start-ups are frantically developing new technologies and courting carrier customers with their ability to deliver more bandwidth at greater speeds and lower costs.