Ciena Near Big Verizon Win

Verizon (VZ Quote) is making a shopping list for optical gear, and Ciena (CIEN Quote) might just have the goods.

The New York phone giant will soon be soliciting bids from suppliers for "optical cross connects," says one source familiar with the company. And though outfits such as Alcatel-Lucent (ALU Quote) and Tellabs (TLAB Quote) will likely be considered, Ciena is looking like an early favorite with its popular CoreDirector optical switch, the source says.

"Verizon has basically told Ciena what it wants, and Ciena has been putting a lot of development into what I would call a CoreDirector 2," said the source.

The so-called request for proposal, or RFP, from Verizon is expected go out this spring. Contract decisions could be made in December, the source speculates.

Both Verizon and Ciena representatives declined to comment.

After a five-year lull in the wake of the telecom collapse, demand for optical-networking gear is starting to pick up again as phone companies look for new bigger systems to help manage increasing traffic volume.

The original crop of optical-switch makers such as Sycamore (SCMR Quote) and Nortel (NT Quote) never gained wide acceptance among telcos, but Ciena's CoreDirector has managed to notch enough customer wins to stay in the game through the crunch.

The CoreDirector is still going strong apparently. In Ciena's most recent quarter, CoreDirector sales totaled $39 million, or about 23% of the company's total revenue.