Nortel Beware: Cisco Shakes Up the Optical Market With New Router

Cisco (CSCO Quote) Monday broke a long silence on its widely awaited optical networking efforts, saying Worldcom (WCOM Quote) agreed to test the Monterey Wavelength router.

Carl Russo, Cisco's chief of optical networking, also said in an interview with TheStreet.com Monday that closely held PetroNet, an emerging Englewood, Colo.-based fiber optic network builder, has agreed to buy the Wavelength router. Terms of the contract weren't disclosed, but Cisco says it will probably help finance a part of the deal. Worldcom confirmed it is testing the device but declined to offer further details.

The Worldcom and PetroNet developments show that giant Cisco, long a laggard in the hot optical networking sector, now has a product that will allow it to compete with the industry's leaders, Nortel (NT Quote) and Lucent (LU Quote). Stocks of optical networking and equipment stocks have skyrocketed in recent months as investors handicap winners in the latest version of Internet sweepstakes. Cisco, itself about 20% off its highs of the spring, rose 88 cents to 66.38 Monday.

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