Qwest Looking to Spend More on Long-Haul Network

Implications: There is a high likelihood that Qwest will expand its optical equipment budget for its interexchange network.   2.      Qwest has evaluated at least three suppliers for 40G technology: Ciena, Infinera, and Nortel. 3.      In addition to other factors, Ciena’s seven-year plus relationship with Qwest, gives it the upper hand.

Analysis:  Infinera has been pushing hard at Qwest.  There had been conjecture in the past that the carrier might have had its system in its network – apparently untrue.  It appears that Qwest does not feel totally comfortable with going with the relatively new manufacturer.  Price is evidently not an issue for the vendor.  In fact, in order to make penetration into tier-1 service providers, including its recent win at Deutsche Telekom, Infinera has evidently been very aggressive on price.  

Qwest likes Nortel’s 40G solution.  However, it seems that its prices were considered to be unacceptable to the service provider.  

As a result, Qwest is likely to go with Ciena.  At times in the past, the carrier’s purchases have represented a high proportion of the vendor’s revenues.