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Publication: Light Reading
Date: 7 May 2005
Title: Transmode merger pays off

Swedish optical vendor Transmode Systems AB has seen an almost immediate benefit from its takeover of fellow Swedish firm Lumentis AB, as the company has just announced a sizeable deal with Norwegian incumbent carrier Telenor ASA.

The national operator will use a mix of the Lumentis "Mentis" metro WDM platforms, a family of products that includes the large metro box (M3000), the mid-sized M301, and the pizza-box M101.

"We have experienced a rapid growth in broadband penetration and of traffic on our network, so we needed to expand the capacity, which is what Transmode's technology is allowing us to do," says Telenor fixed-line network spokesman Arild Johannessen. "We're also in the transition stage from our traditional network towards an all-IP network, and, although that will take a number of years, deploying Transmode's technology is part of that process."

Johannessen says it's too early to say whether Transmode's equipment will be used in any network expansion projects at Telenor's new broadband operations in Sweden and Denmark. And he can't say which other companies had their products tested as part of the bidding process, or how much the deal will be worth. "We tested equipment from several companies, but I can't identify them."

Transmode's VP of marketing and business development, Michael Crossey, is a bit more forthcoming. He says the deal will be worth more than Û10 million (US$12.5 million) during the next three years, and possibly even up to Û30 million ($37.6 million). That's a lot for a company with annual revenues of $16.5 million in 2004.

Crossey says Telenor was particularly keen on a new technical development that Transmode calls the double/dual card, which sounds like a bit of a screwy name. But there's a reason for doublespeak: the dual refers to the ability to aggregate two Gigabit Ethernet signals into a single wavelength, and the double refers to the two wavelengths supported by the card. So, in total, it can aggregate four signals across two wavelengths. Transmode is set to officially announce this product development in the run-up to Supercomm.

He also says that being a bigger company helped Telenor make the final decision to choose Transmode over the other contenders, which Crossey says included ADVA Optical Networking and Nortel Networks Ltd., among others.

"In the past the size of the company has come up as a concern. Now we have the critical mass to support such a customer. For a growing optical company it's a milestone to have a Tier carrier customer. Now our sales team is focused on similar opportunities."

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