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Ciena Teams With Deutsche Telekom Arm for Fiber Connectivity

Zacks Equity Research

In order to address the high traffic requirements across Europe, Ciena Corporation CIEN recently collaborated with the wholesale arm of a German telecommunications company — Deutsche Telekom AG DTEGY. Dubbed Deutsche Telekom Global Carrier, this wholesale provider of innovative connectivity services will leverage Ciena’s much-acclaimed WaveLogic 5 Extreme (WL5e) to achieve higher spectrum efficiency across its data centers in Vienna, Austria. Markedly, Ciena continues to benefit from market share gains on the back of technology leadership and diversified customer base in high-growth markets.

Formerly known as Deutsche Telekom International Sales and Solutions, Deutsche Telekom Global Carrier is a Tier-1 network operator that helps customers to stay updated in this era of global connectivity with rapid technological advancements. Equipped with greater flexibility and streamlined processes, the leading wholesale provider offers a broad portfolio of Internet Access, IP-Transit as well as Ethernet solutions. With a subscriber base of more than 250 million, Deutsche Telekom Global Carrier maximizes its net cash position by reducing wholesale costs to enable attractive wholesale and retail propositions. Apart from its expertise in IoT and cloud applications, the company also provides seamless in-flight connectivity across Europe with a one-of-a-kind integrated satellite and LTE-based ground network.

Per the collaboration, the company will deploy its WaveLogic 5 Extreme network to provide seamless connectivity solutions across Europe. Markedly, Ciena’s WL5e technology is the fifth generation of coherent optical solutions that enables ubiquitous deployment of seamless optical networking with an unrivalled single wavelength capacity of 800G. This maximizes operational efficiencies as well as encourages cost savings and service agility in long haul infrastructure and submarine applications. Ciena’s WL5e helps network providers streamline their networking infrastructure to deliver data-heavy bandwidth services and manage exponential traffic growth.

In addition, the wholesale unit of Deutsche Telekom plans to capitalize on Ciena’s avant-garde 6500 packet-optical platforms and Waveserver transponsders with Manage, Control and Plan (MCP) domain controllers. The 6500 packet-optical platform consists of simple-to-deploy connectivity solutions that improves scalability and addresses unpredictable traffic requirements with minimal footprint. The Waveserver family of interconnect platforms are powered by WaveLogic 5 Extreme and WaveLogic Ai coherent optics. Meanwhile, MCP is a cloud-native platform which accelerates end-to-end operational workflows through SDN software control and automation. With that, the innovative core transport network infrastructure will provide flexible long-haul fiber network to enhance the connectivity requirements of customers based in Europe.

Notably, Ciena is expected to benefit from rising demand for packet-optical transport and switching products, integrated network and service management software. Additionally, it is investing in the data and optical fiber market to cash in on tremendous growth opportunities offered by rising bandwidth demand from network service providers. The company 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 likely to boost the top line in the long run.

Ciena has long-term earnings growth expectation of 16.3%. The company has topped earnings estimates thrice in the last four quarters. It has a trailing four-quarter positive earnings surprise of 18.4%, on average. Backed by efficient operational strategies, the stock has returned 43.2% compared with the industry’s growth of 42.5% in the past year.

Ciena currently has a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the broader industry are Bandwidth Inc. BAND and InterDigital, Inc. IDCC, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bandwidth’s bottom line surpassed the Zacks Consensus Estimate in the last four quarters. The company has a trailing four-quarter positive earnings surprise of 89.4%, 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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Ciena Corporation (CIEN) : Free Stock Analysis Report
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