Nortel wins contract with Cingular, postpones OPTera switch
Story by Michael Meehan

MARCH 07, 2002 ( COMPUTERWORLD ) - In what has been an up-and-down week for Nortel Networks Corp., the company announced the indefinite postponement of a photonic switch for optical networks and the signing of a $500 million, three-year contract with Cingular Wireless.

Called the OPTera Connect PX, the switch would have allowed users to send data entirely in the form of light through large-scale optical networks.

David Chamberlin, a spokesman for the Brampton, Ontario-based company, said the switch had been used on a trial basis in some companies but Nortel determined that the market for such a product is currently soft.

"It has become clear that optical spending will now focus on interconnect and bandwidth management, as well as operational challenges," Chamberlin said.

Steve Leaden, president of telecommunications and networking consulting firm Leaden Associates Inc. in Washingtonville, N.Y., agreed that customers are currently dealing with lower-level issues. He noted that cell phones and personal digital assistants have complicated messaging environments and that users are undergoing "a culture merger" between their data and telecommunications units.

Nortel did, however, land a big fish in the wireless market. It signed the deal with Atlanta-based Cingular, the nation's second-largest wireless carrier, in late November.

The two companies have already been rebuilding Cingular's wireless network in the southeastern U.S., and the companies plan to soon start work in Puerto Rico.

Cingular hopes to boost its voice radio traffic by up to 120% on a single cell with the new Nortel infrastructure. The wireless carrier also hopes to make significant upgrades in its data transmission capabilities, location-based services and virtual private network security capabilities.

Leaden said that in general, wireless carriers are trying to catch up to modem data speeds, which are on average three times faster. He added that carriers are also building to take advantage of technologies such as Global System for Mobile Communications, a wireless digital telecommunications standard widely used in Europe.