Nortel's 40G Leadership Translates to New Customers, New Revenues

TORONTO, ONTARIO -- (Marketwire) -- 06/23/09 -- New industry analysis shows that the market for high-bandwidth 40G optical solutions continues to escalate, and that Nortel(1) (TSX: NT)(OTCBB: NRTLQ) is the clear leader in this high-growth segment with a 41 percent share of the market. The new report from industry analyst firm Dell'Oro Group(2) predicts 40G solutions will soon comprise US$1.2 billion in revenue worldwide.

"While the overall worldwide optical market declined 20 percent sequentially and 11 percent year-over-year mainly due to the effects of the global economy, the 40G market has shown continued growth and strength with a 1Q09 increase of 8 percent sequentially and 400 percent year-over-year," said Jimmy Yu, optical market analyst, Dell'Oro. "We expect 40 Gbps revenue to grow at a 35 percent compound annual growth rate to a market size of $1.2 billion in revenue by 2013."

Since the first availability of Nortel's 40G/100G Adaptive Optical Engine in the second quarter of 2008, Nortel has rapidly risen to be the clear leader in 40G wavelength shipments according to the latest Dell'Oro report. Dell'Oro also shows that Nortel's share of the 40G market has steadily increased from 31 percent in 2Q08 to 41 percent in 1Q09.

Already, 46 service providers around the world have signed on to deploy Nortel's 40G solution, with about one third of those providers being new Nortel optical customer opportunities. In all, over 1,500 Nortel 40G ports have been shipped to date. Nortel is also a leader in the development of 100G solutions, with seven successful 100G field trials already announced, and availability of the Nortel 100G solution planned for later this year.

While some optical equipment vendors have essentially skipped development of 40G solutions to push their 100G vision, Nortel provides a clear evolution path for service providers from 10G to 40G and on to 100G.

"As the rest of the industry continues to race to develop a viable 100G solution, Nortel is able to leverage technology from our commercially available 40G solution that is easily deployed today and can be seamlessly upgraded to 100G without a major network reinvestment," said Philippe Morin, president, Metro Ethernet Networks, Nortel.