ONT vendor TXP suspends operations

TXP, the vendor of optical network terminals (ONT) – the customer premises equipment in fiber-to-the-premises networks – suspended all operations last month and laid off nearly all its employees a day after getting a default notice from one of its major investors.

On December 11, TXP CEO Michael Shores got a letter from YA Global Investments accusing it of being behind on payments exceeding $250,000 and demanding immediate repayment of more than $10 million.

Texas-based TXP got into the ONT business in 2006 by licensing technology developed by Siemens. That deal was set to expire late last year, leaving all revenue from future ONT sales to TXP. But the company had thus far gotten most of its revenue from supply chain management services and prototyping and assembly services. Its biggest customer was Tellabs, which contributed 28% of the $5.8 million in revenue TXP reported for the first half of last year. It also named Adtran as a customer.

TXP announced in August that it was being acquired by the China-based Cambridge Industry Group in a deal company executives said would finally aid the harsh economics of ONTs that helped convince Tellabs to reconsider its investment in the access space last fall.