Ciena says its Verizon metro optical deployment is on track

dark fiber
Ciena CEO Gary Smith said the company expects platform shipments to gradually ramp up in 2017.

Ciena is moving forward with a metro optical deployment for Verizon, which named the vendor as one of its packet optical transport system (P-OTS) suppliers in 2015.  

Verizon announced last year that it was using Ciena and Cisco's ROADMs to "advance and scale its network while maintaining existing services and reducing service-activation times” as it transitions to 100G in the metro.

Gary Smith, CEO of Ciena, told investors during the company's fourth quarter earnings call that the vendor shipped some platforms to the telco this year and it expects “the gradual ramp across 2017.”

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“I would say, though, that in general I think the investment community got a little bit ahead of this because I think by-and-large that project is on track, and I think they will gain momentum throughout ’17, ’18 and through to ’19,” Smith said during the earnings call, according to a Seeking Alpha transcript. “So, I think that's from our perspective completely on track.”

Smith said that Ciena is also seeing momentum in other countries, including Brazil and Europe, which will translate into revenues next year.

RELATED: Adva, Ciena and Nokia gain optical share on metro 100G, colocation growth, says research firm

On a segment basis, converged packet optical and packet networking were the star performers in the vendor’s portfolio.

Converged packet optical reported $488 million of revenues, up from $484 million in the same period a year ago, while packet networking was $72.4 million, an increase over the $63.2 million in the fourth quarter of 2015.

Software continues to be factor for Ciena as the company reported gains in software platforms and software-related services.

Ciena reported software platforms and software-related services rose year-over-year to $16.3 million and $21.3 million, respectively. During the quarter, Ciena added five new Blue Planet orchestration customers, bringing its total customer count to 18.

Smith said he expects to see continual growth in the Blue Planet software platforms with more of its customers.

“We're seeing very good traction—still nascent, still early days, multiple pilots, trials and awards sort of characterize the market,” Smith said. “I think we begin to see some single-digit million revenues as we come out of Q4 and I think that will continue to scale during ’17.”

Ciena also saw gains in its enterprise segment as sales rose 34% for the year. Likewise, direct web scale revenue was up about 25% and MSO sales were up 11%. Additionally, revenue from its resale agreement with Ericsson was up about 20% for the year and submarine sales were up 9%.

“There have been a number of new wins this year with Ericsson, typically in geographies where Ciena doesn’t have a physical presence and Ericsson has a strong in-country presence and relationship,” Smith said. “We’ve been able to work together to compete in those countries and win new business.”

From an overall financial perspective, Ciena reported revenues of $716.2 million, up from $692 million for the fiscal fourth quarter in 2015.

For fiscal year 2016, Ciena reported revenue of $2.6 billion, as compared to $2.4 billion for fiscal year 2015.

Looking toward its fiscal first quarter of 2017, Ciena expects revenue to be in the range of $615 million to $645 million. Ciena said this outlook is “consistent with the seasonal reductions in order volume and customer deployment activity that we typically experience.”

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