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Ciena Augments Fiber Optic Solution With GlobalNet Tie-Up

Zacks Equity Research
·5 mins read

In a move to revamp connectivity services in Russia, Ciena Corporation CIEN teamed up with GlobalNet, a leading telecommunications company. GlobalNet deployed Ciena’s coherent optical technology — WaveLogic 5 Extreme (WL5e) — to deliver high-quality bandwidth and interconnect services across various data centers for a streamlined network infrastructure. Supported by a global scale of operations, diversification and technology leadership, the latest collaboration will enable Ciena to benefit from market share gains and enhance network automation capabilities. The company will gain an accretive customer base in developed markets for a steady revenue stream.

GlobalNet is a leading telecommunications services provider based in Saint Petersburg, Russia. The major clients of the company include corporate clients and network operators. Apart from providing Internet access, GlobalNet offers services such as DATAIX, wave length rental and virtual local area network. Equipped with best-in-class modern technologies to deliver reliable communication services to its customers, GlobalNet has a significant presence in Europe and Asia. In addition to Russia, it has more than 30 connection points over a single traffic exchange network across six countries — Kazakhstan, Sweden, Germany, Ukraine, Finland and the Netherlands.

Per the deal, GlobalNet used Ciena’s WaveLogic 5 Extreme network to deliver cost-effective and seamless connectivity solutions across Russia. The WL5e technology is the fifth generation of coherent optical solutions that enables deployment of optical networking with an unparalleled single wavelength capacity of 800G. As a result, the telco achieved an impressive network capacity of 800 Gbps across data centers in Saint Petersburg and 600 Gbps between Moscow and Saint Petersburg. From access to single-span data center interconnect, the cutting-edge technology has the ability to address network application requirements and delivers nearly 50% more capacity per wavelength with 30% increase in fiber capacity.

The WL5e fiber optic network maximizes operational efficiencies as well as encourages cost savings and service agility in long haul infrastructure. It helps network providers streamline their networking infrastructure to deliver data-heavy bandwidth services and manage exponential traffic growth. Markedly, this deployment was made possible with the help of Ciena’s Waveserver 5 compact interconnect platform. It delivers 100GbE and 400GbE across any distance, from metro to subsea and supports high-growth applications in a compact platform. Designed to manage complex automation and integration challenges, Waveserver 5 provides highest network capacity and facilitates volume deployments for an exceptional end-user experience. The core transport network infrastructure by Ciena will likely reinforce economical network operations across Russia, thereby providing additional flexibility to support GlobalNet’s enterprise connectivity offerings.

Moving forward, Ciena is likely to benefit from growing demand for packet-optical transport and switching products, integrated network as well as service management software. Additionally, it is investing in the data and optical fiber market to capitalize on the tremendous growth opportunities offered by bandwidth demand from network service providers. The company is confident about its business model, while augmenting its Packet Networking portfolio to capitalize on 5G. It is also focused on the expansion of its Web Scale IT Architecture in the enterprise market by launching products like chipsets, metro architecture and mobile backhaul solutions. Its strong product portfolio is expected to boost the top line in the long run.

Ciena has a long-term earnings growth expectation of 16%. The company has topped earnings estimates thrice in the last four quarters. It has a trailing four-quarter positive earnings surprise of 25.6%, on average. The stock has returned 28.2% compared with the industry’s growth of 27.8% in the past year.

Ciena currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader industry are ADTRAN, Inc. ADTN, United States Cellular Corporation USM and InterDigital, Inc. IDCC. While ADTRAN and United States Cellular sport a Zacks Rank #1 (Strong Buy), InterDigital carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

ADTRAN’s bottom line surpassed the Zacks Consensus Estimate thrice in the last four quarters. The company has a trailing four-quarter positive earnings surprise of 8.5%, on average.

United States Cellular’s bottom line surpassed the Zacks Consensus Estimate twice in the last four quarters. The company has a trailing four-quarter positive earnings surprise of 104.1%, on average.

InterDigital’s bottom line surpassed the Zacks Consensus Estimate in the last four quarters. The company has a trailing four-quarter positive earnings surprise of 99.5%, on average.

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