The telecom equipment company is hoping to woo more cost-conscious carriers with a product that won't give businesses superfluous bandwidth.
The company is planning to make its Optera Metro 5100 switch available in May with cheaper, less-advanced technology for carriers to offer bandwidth for services like high-speed Internet access, video, streaming media and data storage.
"Nortel was serving the Fortune 200 before, and this expands the market to the Fortune 1000," IDC analyst Sterling Perrin said.
The Optera uses coarse WDM (wavelength division multiplexing) technology as opposed to its more evolved cousin, DWDM (dense wavelength division multiplexing). DWDM was first used in long-haul networks that run between cities, though Perrin said he believes the technology is making its way into metropolitan networks, which handle data in urban areas.
"The Optera 5100 is the next step, which is bringing the optical connection to the customer," Perrin said.
Most carriers use DWDM within long-haul networks to transport information, which would have to be switched over to a slower connection such as a T1 line in order to reach a customer in a city.
WDM technology is faster in general because it allows more data to be sent over a single optical fiber. Coarse WDM handles less information than DWDM but also costs less to manufacture, making it more of an attractive investment for carriers.
Nortel said it believes that the new switch will give carriers more options. Service providers can now use its Optera 5200 for large businesses that require huge data capacity, like financial institutions, for example. On the other hand, they can install the Optera 5100 for businesses that do not need as much bandwidth.
Perrin said that before the creation of the Optera 5100, Nortel could only offer the 5200, a more expensive DWDM switch with so much power that most customers would often leave much of the capacity unused that the carriers still paid for.
And Nortel is not alone in this market. Perrin said ONI Systems and Ciena, which are in the process of merging, sell gear in the metro market, and that Lucent Technologies and Cisco Systems also have a presence.