Motorola named second source for Verizon FTTP gear

Motorola announced today that it has been chosen to supply equipment for Verizon Communications' fiber-to-the-premises deployment, a second supplier to compete with the existing one, Tellabs.

The five-year contract, which refers to optical line terminals, optical network terminals (ONTs) and optical amplifiers, was predicted by some analysts as far back as last fall, when Motorola was named as a supplier of video head-end technology, digital set-tops and integration services for the same deployment. But at least one analyst expressed surprise today that the announcement came as soon as it did.

On the company's earnings call today, Tellabs' CEO Krish Prabhu was loathe to make predictions on Verizon's future buying habits, but he expressed confidence that Tellabs has what he called "the inside track" on Verizon's FTTP business.

"I feel very confident that, as the customer scales up their network, we will be the customer's first choice," Prabhu said. "At least that's clearly my number-one objective for this year."

Prabhu claimed his company has some advantages over Motorola in competing for Verizon's business, including the benefit of having already worked through the operational issues that normally occur in a deployment of this size (Advanced Fibre Communications, which Tellabs acquired, was named a Verizon FTTP supplier in the fall of 2003.) In addition, Tellabs is currently introducing a new ONT, the one gained through its recent acquisition of Vinci Systems.

That ONT, which Tellabs now calls the 611, "has significant input from [Verizon] in its design," Prabhu said. It is currently in Verizon's labs and could be deployed in the field as early as the second quarter or early in the third quarter, he said, adding the caveat that Verizon controls the timetable. "If they give us the green light, we expect to start scaling in the third or fourth quarter," he said.

"All I can say is, from our experience in rolling out DSL and Sonet ADMs, RBOCs are motivated to primarily work with one supplier for 90% of their business but would like a second supplier environment to make sure the first supplier doesn't take the business for granted," he added, when the question came up again.

Both companies won the Verizon business with the help of acquisitions--Tellabs, through its acquisition of Advanced Fibre Communications, and Motorola, through its acquisition of Quantum Bridge.