Ciena’s Prospects Abroad are as Strong as Ever

Implications: 1.      Ciena’s international position is definitely looking up. 2.      Throughout Europe, the supplier is working really hard to get additional market penetration. 3.      While Asia has never really been a hot spot for Ciena, the outlook for South America appears impressive.

Analysis:  Of course, Ciena recently tried to get into Deutsche Telekom for a large contract, but lost out to Infinera – primarily because the latter seems to have sold the product at less than cost -- and so there are indications that it took the business at a loss.  The former can afford not to price below an acceptable level.  Therefore, factors announced by Infinera in winning the account including “improved scalability, flexibility, and speed of service delivery” were secondary issues.  Infinera evidently felt pressured to make a big splash in a Tier 1 company as well as to shore up expectations on revenues.  

Apparently, Ciena appears to be vigorously engaging with France Telecom (as an incumbent) and other large carriers in Europe to potentially increase its sales on the continent. Along with its powerful position at BT, Ciena has been an established vendor to both Swisscom and Neuf Cegetel.  

Future sales to the growing South America space might turn out to be a real sleeper for  Ciena.  In the past, the supplier arguably got a little bit ahead of itself in looking for business in Brazil.  At one time, it had two offices in the country.  However, Ciena left a lasting impression with the Brazilian market – and future business in Argentina looks good as well.  There was also a recent announcement of a contract award in Chile.  

While it has had some success with Korea Telecom and SingTel, Ciena never really made that much penetration into Asia.  And despite the source article perhaps suggesting otherwise, even the inroads into India seem to be more for development work than for actual sales.