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Ciena (CIEN) Augments Cable Capacity With Batelco Partnership

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Ciena Corporation CIEN recently joined forces with Bahrain Telecommunications Company (Batelco) to expand the cable capacity of the Batelco Gulf Network (“BGN”) in a concerted effort to boost the latter’s digital ecosystem. Per the agreement, Ciena will be responsible for upgrading and supporting BGN’s bulk network traffic, thereby enabling it to seamlessly address the burgeoning requirement for over-the-top services and high-speed content among customers.

Backed by a streamlined network infrastructure, the alliance is expected to facilitate Batelco to cater to Bahrain’s growing digital economy while effectively meeting the continuous growth in capacity requirements supported by exceptional delivery timelines. This will eventually help in delivering better digital experiences for subscribers in the Middle East country.

Lately, network operators are migrating toward a more adaptive network for high-bandwidth services with simplified operations. Given the impressive record of Ciena’s back-to-back cable network deployment wins with multiple telcos, the move is likely to make the Hanover, MD-based company well positioned to benefit from diversification across customer segments and regions, along with its technology leadership. Driven by strong prospects, shares of Ciena gained 1.3% to close at $60.77 on Jun 7.

With an industry exposure of more than three decades, Batelco is touted as Bahrain’s leading digital solutions provider that serves both consumer and corporate market segments with state-of-the-art wireless telecommunications solutions. It boasts a comprehensive product portfolio which includes 4G LTE wireless Broadband networks and Multiprotocol Label Switching based regional data solutions. Markedly, BGN was launched in 2018, fully managed and operated by Batelco.

This international cable system provides the Gulf Cooperation Council with enhanced connectivity solutions. Spanning across a distance of more than 1,400 kilometers, the protected terrestrial network operates over the Optical Transfer Network and enables Batelco to have an access to onward connectivity to Europe and other major regional landing stations. It has been specifically designed to support speeds of more than 17.6Tbps to fulfill the networking demands arising from the ever-increasing usage of innovative technologies like IoT, 5G and managed services.

Impressively, BGN is considered as a reliable alternative for international submarine cables, on the back of its shortest inter-Gulf latency. Moreover, Ciena’s wide-ranging professional services in the region coupled with its extensive technical expertise acted as a bonus for delivering secure connectivity to Batelco’s customers. The collaboration also enables service providers to capitalize on cost-effective solutions with utmost flexibility, thanks to the two-fold network upgrade by Ciena. Driven by such distinct strategy, the recent partnership with Ciena is eyed as a perfect opportunity to bolster Batelco’s digital transformation initiatives in the Gulf region.

Moving forward, Ciena is expected to benefit from growing demand for packet-optical transport and switching products, as well as service management software. 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, while boosting the Packet Networking portfolio to capitalize on 5G.

Backed by its technological prowess and robust business dynamics, the company is focused on the expansion of Web Scale IT Architecture in the enterprise market by launching products like chipsets, metro architecture and mobile backhaul solutions. The demand drivers of Ciena’s business, including increased network traffic and the adoption of cloud architectures remain strong, instilling optimism.

The Zacks Rank #3 (Hold) stock has returned 20.3% compared with the industry’s growth of 20.2% in the past three months.

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Some better-ranked stocks in the broader industry are Altice USA, Inc. ATUS, Corning Incorporated GLW and Ooma, Inc. OOMA. While Altice sports a Zacks Rank #1 (Strong Buy), Corning and Ooma carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Altice delivered a trailing four-quarter earnings surprise of 61.5%, on average.

Corning delivered a trailing four-quarter earnings surprise of 39%, on average.

Ooma delivered a trailing four-quarter earnings surprise of 65.5%, on average.

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Ciena Corporation (CIEN) : Free Stock Analysis Report

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