VimpelCom selects Ciena for optical network upgrade

VimpelCom (NYSE: VIP) on Tuesday named Ciena (Nasdaq: CIEN) as the vendor of choice to upgrade and expand its national optical network.

The Russia-based service provider will deploy Ciena's 6500 Packet Optical Platform in network links extending over about 10,700 km.

This network initiative will focus on three key areas of the country: Moscow-Urals and Urals-Siberia connections, the southern part of the Western Russia network (the "Big European Ring"), in addition to building a 100G network in the far eastern part of the country.

In the network that connects Moscow and the Urals, VimpelCom will add additional 40G channels without disrupting existing customer services and the existing network infrastructure. By the end of the year, the service provider will be able to offer customers 40G data transmission speeds over one wavelength along with expanding the network into the far eastern region. All of this traffic will be then connected by a 3,000 km network with 100G on each wavelength.

A big driver for this core network initiative is that it will serve as the wireline backbone to backhaul VimpelCom's wireless LTE network services and business services. Like domestic U.S. service providers, namely AT&T (NYSE: T) and Verizon (NYSE: VZ), which are both aggressively rolling out LTE and next-gen wireline IP networks, Vimpelcom will be able to better support the greater demand for higher speed broadband wireless data and supporting IP/MPLS, cloud and Ethernet services.

"The roll-out of LTE services and increase in broadband usage, coupled with the prospect of new data-heavy enterprise services, dictate that VimpelCom's core network must be ready," said Alexey Sapunov, Transport Network Director at OJCS VimpelCom.

Following the upgrade of the northern section of the 'European ring' it made last year, VimpelCom will deploy Ciena's 40/100G coherent optical technology in the southern section of this network, including both Rostov and Krasnodar.

At a time when the entire European continent is in economic turmoil--a factor that's effecting all of the major telecom suppliers including Ciena--gaining a renewal contract with a large carrier like VimpelCom is important as it continues to weather into the another challenging quarter where service providers are being cautious about spending. In its Q3 financial call, the vendor forecast that Q4 2012 revenue will be between $455 million and $480 million, falling short of analyst expectations of $499.7 million.

For more:
- see the release

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