Ciena Corp (NYSE:CIEN)

CAPS Rating: 3 out of 5

Supplies communications networking equipment, software and services to telecommunications service providers, cable operators, governments and enterprises.


Player Avatar ssouvigny (< 20) Submitted: 4/8/2010 5:43:48 AM : Outperform Start Price: $16.26 CIEN Score: -55.60

Having spent 30+ years working for a very large telco I can attest to the fact that a paradigm shift in telephony is occuring today. As subscribers abandon their copper fed home telephone service in favor of cell phones, the remaining pipe to that home is DSL. Those DSL connections are rapidly being converted to naked DSL, that is a DSL pipe that does not require an associated telephone number on the copper cable pair. The "new" naked DSL is then able to carry internet based telephone numbers. On the cell phone end of the buisness, Increased reliability is driving the cell phone carriers to to abandon copper fed T1 lines to their towers in favor of fiber. These defections of copper to fiber sets up the final financial incentive resulting from the shift; cable mining. That abandoned copper in the ground is worth money. The telcos are scrapping it as quickly as possible to convert it to cash. All of this works in Cienna's benefit as a vendor of choice providing routers to the telcos. (Disclosure: long T, VZ and Q.)

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