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Infinera Corporation Message Board

  • alpha1beta2gamma3 alpha1beta2gamma3 May 3, 2013 5:03 AM Flag

    Huawei-Level 3 Sales seen off...

    No surprise here. Huawei is not going to win the contract with Level 3. Infinera and Ciena are cited as among the potential bidders. Considering Level 3's history with Infinera, I say Infinera's got the upper hand. Using the $200 million quoted in the article, this was worth $50 million a year. Assuming it's the same sort of amount (conservative ?), I would take $50 million in additional revenues for Infinera for each of the next few years.

    ///

    "Huawei Technologies Co. has emerged as the world’s second-largest maker of networking gear thanks to growth in China, Europe and emerging markets. The U.S. business is a different story.

    Just $1.3 billion of the Shenzhen, southern China-based company’s $35 billion in 2012 sales came from America. Now, amid rising congressional concerns about Chinese government- sanctioned hacking, Huawei may lose one of its most important stateside customers: Level 3 Communications Inc. (LVLT), which runs a broadband network that helps carry traffic for most telecoms.

    Level 3 has bought $200 million in optical networking gear from Huawei since 2009, according to an estimate by Erik Suppiger, a JMP Securities LLC analyst. The Broomfield, Colorado-based carrier is soliciting bids for its next three- year order, and Huawei isn’t likely to win, said two people who have spoken with Level 3 about its intentions and weren’t authorized to discuss them publicly.

    “There’s no way Level 3 will possibly select Huawei,” said Andrew Schmitt, an analyst for Infonetics Research Inc.

    ...

    ///

    See Bloomberg.

    Sentiment: Strong Buy

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    • $200M bought from Huawei since 2009 implies all 10G and 40G gear, given that Level3 has been claiming they're still assessing whether to invest into 100G. Hopefully the DTN-X wins out and gets to relegate all this cheap Chinese gear to the backroads of America low traffic routes.

 
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