NTT upgrade could cheer component vendors
Japanese telecommunications giant Nippon Telegraph and Telephone (NTT) is reported to be planning a massive upgrade to its fiber-optic network.
According to the Japan-based newspaper Nihon Keizai Shimbun, the company will spend ¥5 trillion ($47 billion) replacing fixed copper lines with optical links by the end of this decade.
If accurate, the development could be a shot in the arm for suppliers of III-V-based components such as laser diodes and photodetectors that are used in fiber-optic networks.
And it could be an indication of better times to come for JDS Uniphase, Bookham and Avanex in particular. The three component and module manufacturers all reported heavy losses in the past week as the fiber-optic sector continued its slow recovery.
JDSU, the current market leader with an estimated 20% share according to a recent report (see related story), saw its revenue from communications-based products rise 24% sequentially to $106.1 million, representing 55% of the company s total sales in its first-quarter results.
Despite that strong upturn, the San Jose company still reported an overall net loss of $36 million, with the communications product group posting an operating loss of $10.3 million.
Losses continued at JDSU s rivals Bookham Technology, which is also now based in San Jose, and Avanex in nearby Fremont.
On revenue up 12% sequentially at $43.6 million, Bookham made a $37.1 million net loss for its first quarter ended October 2. Although expecting to break even at the gross margin level in the next quarter, Bookham still expects a cash burn of up to $22 million.
The company now has $79 million in cash and short-term investments on its balance sheet, down almost $38 million from the prior quarter s figure.
Bookham CEO Giorgio Anania pointed to some more positive signs, however. Revenue from Nortel, the company s biggest customer, has returned to previous levels, and the recent quarter also saw the first volume shipments from Bookham s low-cost manufacturing site in China.
Meanwhile, Avanex recorded a net loss of $22.3 million on sales of $35.8 million.
