Tellabs may have won Qwest ROADM deal

Tellabs may have won a deal to supply Qwest Communications with reconfigurable optical add/drop multiplexers (ROADMs), according to one Wall Street analyst.

In a note issued this morning, Morgan Keegan’s Simon Leopold said he believes Tellabs beat out Ciena and Fujitsu Network Communications to win what he called a “modest” deal with Qwest, estimated to be worth perhaps $16 million in revenue this year and potentially more thereafter.

After selling its 7100 ROADM platform to BellSouth, Tellabs surprised the vendor and analyst communities when it beat incumbent supplier Fujitsu to win Verizon Communications as a ROADM customer in 2005. The Verizon deal could yield $100 million this year, Leopold estimated.

The Qwest win won’t be very profitable in the near term, he wrote. “Early sales come at a price.” But it bolsters Tellabs’ credibility in the ROADM market and demonstrates its ability to decrease its dependence on its traditional cross-connect product line, which is expected to decline over time.