Linthicum, Md.-based carrier equipment provider Ciena Corp. announced two acquisitions Thursday, including Kanata, Ont.-based Catena Networks Inc., designed to spearhead Ciena’s efforts in the broadband access market.
Catena produces equipment that allows telecommunications firms to deploy DSL access from remote terminals, while Ciena’s other acquisition, Internet Photonics Inc., makes optical Ethernet gear, which allows cable companies to roll out cable-based broadband access.
Ciena, which makes data-oriented hardware and software for carrier networks bought Catena and Internet Photonics because the company believes sales of carrier broadband equipment are set to grow.
“Both get us into new and growing markets,” said Gary Smith, Ciena’s CEO.
Ciena’s revenues from its core and metro access products have fallen significantly since 2001, so it makes sense for the company to grow its business in a different direction, said Matt Davis, an analyst with Boston-based research firm the Yankee Group.
“Core and metro have cooled and I think the entire industry knows the carrier capex is going to be spent on services creation,” he explained. “And infrastructure that supports that is where the game’s going to be played. Now that we’re moving from dumb access to intelligent networks, the first mile is a vital part of that.”
Both Catena and Internet Photonics are privately held companies. The Catena acquisition is valued at about US$486.7 million and the Internet Photonics purchase at about US$150 million. Ciena is issuing stock to cover both acquisitions.
Ciena has a wide range of carrier customers around the globe including Toronto Hydro Telecom in Canada and AT&T Corp., Verizon Communications Inc. and SBC Communications Inc. in the U.S.