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Calix, Inc has agreed to buy the FTTH product line of Ericsson for an undisclosed sum. The two companies also agreed that Ericsson would resell Calix’s newly beefed up access equipment portfolio worldwide.

The agreement centers on the Ericsson EDA 1500 GPON optical line terminal (OLT) and complementary portfolio of optical network terminals (ONTs). The companies expect the product line acquisition to close in the fourth quarter of this year. Calix expects operations related to the acquired assets to be accretive to non-GAAP earnings per share.
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Calix will offer jobs to as many as 61 U.S.-based Ericsson employees. The company also will assume ongoing support of the acquired products.

Ericsson, meanwhile, will sell both its old products as well as Calix Unified Access systems and software as its preferred options for fiber and VDSL2 applications in 180 countries for three years.

"This partnership provides Calix, already North America's fiber access deployment leader, with an extensive new global reseller channel, while our acquisition of Ericsson's fiber access portfolio delivers powerful new complements to our industry-leading Unified Access portfolio," said Carl Russo, president and CEO of Calix, via a press release. "This partnership, built on a clear alignment of corporate strategy and direction, allows Ericsson to fully leverage its strengths in wireless and end-to-end services while relying on Calix to provide innovation and expertise in fixed-line broadband access. We are excited about the opportunity to assume responsibility for development and support of Ericsson's fiber access business, and look forward to working closely with Ericsson and its broad customer base as a preferred global partner."

"We believe that this partnership will provide our existing fiber access customers with world-class support and maintenance, and an expanded portfolio of access systems and software from a leading company totally focused on access," said Jan Häglund, vice president and head of product area IP and broadband at Ericsson, in the same release

Vodafone is now using 100-Gbps technology from Ciena Corp. (NASDAQ: CIEN) to link two of its data centers in New Zealand. The links represent the first deployment of 100-Gbps technology in the country, Ciena asserts.

“Data use on Vodafone’s mobile network has grown by over 125% year on year and on our fixed network we’ve seen a 90% year-on-year increase,” said Vodafone’s Chief Network Officer Tony Baird via a Ciena press release. “Now many customers have started using the Internet, email, and applications like Facebook on their smartphone, and their home network for content like TV and movies, it is rapidly becoming a way of life and this trend shows no sign of slowing.

“Upgrading the network between our two Auckland data centers to the fastest in New Zealand means we can stay ahead of the curve for our customers with the ever increasing use of bandwidth intensive data services,” Baird concluded.

Vodafone installed the coherent-based 100-Gbps technology on its Ciena 6500 Packet-Optical Platforms. The installation did not disrupt existing services because the new 100-Gbps capabilities can run alongside existing 10- and 40-Gbps channels, Ciena says.

“Service providers across the globe are looking to improve their network efficiency and reliability while also expanding capacity to meet surging demand from a new breed of smartphone and tablet users,” says Anthony McLachlan, Vice President and General Manager, Asia Pacific, Ciena. “Vodafone New Zealand is an excellent example of a company with the forward vision to deploy network technologies that suit their present-day requirements and also lay the groundwork to support future expansion and network services at speeds that reach 100 Gbps and beyond.”

After a down quarter over the first three months of 2012 optical network systems manufacturers saw sales increase sequentially by 15% in 2012, according to market research firm Infonetics Research. However, year-on-year, 2Q12 was off 10% Infonetics says in its 2Q12 Optical Network Hardware vendor market share report.

For many companies, future prospects depend on their product mix, says Infonetics

"The optical hardware market outlook looks decidedly different depending on which market you sell into," explains Andrew Schmitt, principal analyst for optical at Infonetics Research. "While spending on WDM is reasonably healthy, SONET/SDH is sailing off a cliff. Vendors who have good WDM products but large exposure to SONET/SDH are struggling to replace lost revenue fast enough to show growth."

For example, North American SONET/SDH spending shrank 45% in the second quarter year-over-year. Those companies with heavy exposure to AT&T suffered in particular, as that carrier has cut its SONET spending significantly. Overall, WDM equipment now accounts for 80% of all optical spending in North America, according to Infonetics.

Huawei extended its market share lead during the quarter, thanks in part to an uptick in spending by carriers in the Asia Pacific sector. Winds from this direction will continue to fill Huawei’s sails as well as boost ZTE, Schmitt believes. "Asia Pacific notched a big increase in the second quarter, with large seasonal gains by Huawei and ZTE,” he says. “Despite tepid growth in the first half of 2012, we expect significant growth in optical spending in China, where ZTE continues to take market share from Huawei."

Alcatel-Lucent held onto second place in optical network sales, thanks to a revenue increase of 5%. Ciena posted its strongest quarter ever to maintaining third place overall and slip into second in WDM sales. This chart shows the current market share standings:

Despite repeated lamentations about the region’s economic state, optical equipment sales in Europe, the Middle East, and Africa (EMEA) rose strongly in 2Q12, although followed the overall trend of failing to match sales in the second quarter of 2011. Spending growth on WDM equipment outpaced that on SDH gear, which Infonetics sees as a positive indicator for the region as it implies carriers were doing more than just maintaining current systems.

Infonetics' quarterly Optical Network Hardware report covers worldwide and regional market share, market size, and analysis for metro and long-haul SONET/SDH and WDM equipment, Ethernet optical ports, SONET/SDH/PoS ports, and WDM ports.

A new five-year forecast by Dell’Oro Group predicts increased sales of GPON optical line terminals (OLTs), DOCSIS 3.0 CMTS and VDSL infrastructure equipment through 2016. Driven by growing bandwidth requirements, the report say that GPON will show the fastest growth, followed by CMTS and VDSL, offsetting a trend of declining revenue for slower-speed ADSL equipment.

“Our forecast for GPON growth is driven by deployment in China as well as increasing projects in other global regions,” says Steve Nozik, principal analyst of access research at Dell’Oro Group. “For CMTS, growth will be driven by rapidly increasing Internet traffic, competition with telecom service providers, and an increasing focus on the small and medium-sized business market among cable operators as well as a migration to IP video service.”

The report also expects DOCSIS to continue as the primary cable broadband technology for at least the next five years due to additional channel bonding being used to meet increasing bandwidth needs. VDSL growth will be driven by its higher bandwidth capabilities in association with emerging vectoring technology aimed at extending the life of copper infrastructures by eliminating crosstalk.