Ciena reels in AT&T

After wreaking havoc on Ciena a few years ago by pulling out of a trial, AT&T yesterday revealed it is deploying Ciena Corporation’s Multiwave Metro DWDM equipment in its network. Although terms of the deal weren’t disclosed, AT&T already is carrying live traffic on it in the Los Angeles metro network.

AT&T will use the equipment to provide up to 24 wavelengths of protected OC-48 or OC-192 per fiber.

“With this deal, we are now doing business with all the top Tier 1 IXCs,” said Denny Bilter, senior director of marketing for Ciena. “This marks the start of a really good relationship.”

It’s a stark contrast to 1998, when Ciena was working with AT&T to conduct a trial of the company’s long-haul equipment, while Ciena was on the verge of closing its merger with Tellabs. But just before the merger was to close, AT&T pulled out of the trial, which spooked Tellabs. And with the merger suddenly over, Ciena’s stock sank.

“It’s a really small world,” said Bilter.

Apparently, Wall Street liked that the two companies made amends. Ciena closed up $3.51 at $64.30. The market was not as kind to AT&T though. It closed down $0.76 at $21.15.

But while the deal is a huge win for Ciena, Bilter noted that AT&T typically uses equipment from two different vendors with its deployments.

Other metro DWDM competitors Nortel and ONI Systems are likely candidates to serve as another vendor.