Ciena Near Big Verizon Win

The opportunity for Ciena is quite large, say analysts. Verizon is looking to increase its switching capacity in high traffic areas first by replacing electronic switches with optical gear. Given the number of electronic switches in the Verizon network, analysts estimate the potential value of the job to be somewhere between $500 million and $1 billion over a long period of time.

Each optical switch can replace about five electronic switches, says one analyst, and Verizon has hundreds of electronic switches.

As observers point out, Ciena has a bit of a leg up on the competition. It previously sold CoreDirector switches to MCI, which was acquired by Verizon last year.

Ciena shares have fallen 17% in one week after the company said its operating expenses would be going up this year. The stock was trading down 28 cents at $25.97 at midday Wednesday.

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