Profile: Zhone Technologies Inc (ZHNE.OQ)

Zhone Technologies Inc. (Zhone), incorporated in June 1999, designs, develops and manufactures communications networks equipment for telecommunications, wireless and cable operators worldwide. With the Company's products and solutions, network service providers can migrate from traditional circuit-based networks to packet-based networks and from copper-based access lines to fiber-based access lines without abandoning the investments they have made in their existing infrastructures. In addition to its established product offerings, Zhone launched its MXK IP Multi-service Terabit Access Concentrator (MXK) and multiple new Optical Line Terminal (OLT) and outdoor units. The Company’s MXK product is a converged multi-services access platform that can be configured as a gigabit passive optical network (GPON) or active Ethernet OLT. The MXK GPON line module is ITU-T G.984 compliant, delivering data throughputs of up to 2.5 gigabytes per second (Gbps) downstream and 1.25 Gbps upstream. Each line card is designed for up to 64 passive splits per fiber. Active Ethernet delivers up to 100 megabits per second (Mbps) point-to-point from a 20-port card. During the year ended december31, 2011, the Company sold over 2,200 MXK systems.

Zhone’s MXK product supports the next generation of business and residential fiber to the home or business (FTTx) services. MXK support both passive optical network (PON) and active Ethernet fiber technologies to the node, curb or premises. With its MXK product, service providers can offer digital or ratio frequency (RF) video, high-bandwidth Internet access, voice over Internet protocol (VoIP) and cell relay services from a single OLT over Internet protocol (IP). Additionally, its MXK product provides Zhone features an eight port GPON Module enabling support for up to 9,216 GPON subscribers in a single MXK chassis.

The flexibility of its MXK product enables service providers to choose the technology for both services and network architecture. Active Ethernet provides dedicated symmetric bandwidth to the end customers for deployment of business services. GPON provides a way to deliver bandwidth to the residence for a triple play offering while enabling a host of data and video options for the businesses. In addition to active Ethernet and dense GPON support, the MXK provides an array of multi-service functionality supporting well defined access standards enabling the convergence of voice, data and entertainment over any access medium delivering all IP solutions designed for traffic mix.

The Company’s solutions are based upon its single line multi-service (SLMS) architecture. SLMS architecture was specifically designed for the delivery of multiple classes of subscriber services (such as voice, data and video distribution). This SLMS architecture is designed to interoperate with existing legacy equipment, service providers can leverage their existing networks to deliver a combination of voice, data and video services, while they migrate, either simultaneously or at a future date, from legacy equipment to next-generation equipment with minimal interruption. Its solutions include Triple Play Services with Converged Voice, Data and Video, Packet Migration and FTTx.

SLMS simplifies the access network by consolidating new and existing services onto a single line. This convergence of services and networks simplifies provisioning and operations. SLMS integrates access, transport, customer premises equipment, and management functions in a standards-based system. SLMS is a flexible multi-service architecture that provides services while simultaneously supporting migration to a pure packet network. This flexibility allows service providers to provide carrier performance, and functionality for its services without interrupting existing services or abandoning existing subscribers.

The Company provides support for the full range of fiber-based access network architectures. In many markets worldwide, both business and residential demand for bandwidth is growing to the point where the deployment of fiber in the access network is increasingly desirable. In other circumstances operators choose to deploy passive optical networks (PON) all the way to the customer premises, where a single fiber’s bandwidth is shared through splitters with up to 64 subscribers. Some circumstances demand so-called home run fiber networks (with dedicated fiber resources linking every customer directly to the central office) to maximize bandwidth or service segmentation. By supporting all these architectures within a common SLMS-based platform, the Company provides carriers flexibility to build the network that suits their needs. The Company offers an array of equipment that allows carriers to deliver Ethernet services over copper or fiber. For business subscribers, its Ethernet over copper product family allows carriers to deliver Ethernet services over existing copper SHDSL or T1/E1 circuits. Multiple circuits can be bonded to provide over 70 Mbps.

The Company’s SLMS products address three areas of customer requirements. Its broadband aggregation and service products aggregate, concentrate and optimize communications traffic from copper and fiber networks. These products are deployed in central offices, remote offices, points of presence, curbsides, data and co-location centers, and enterprises. Its customer premise equipment (CPE), products offer a solution for combining analog voice and data services to the subscriber’s premises over a single platform. The zhone management system (ZMS), product provides optional software tools to help manage aggregation and customer premises network hardware. These products deliver voice, data and video interface connectivity for broadcast and subscription television, Internet routers and traditional telephony equipment.

The Company’s legacy products support a variety of voice and data services, and are deployed by service providers worldwide. Its main product during 2011, was its IMACS product which functions as a multi-access multiplexer. In addition to its product offerings, it provides a range of service offerings through its global service and support organization. The Company supplements its standard and extended product warranties with programs that offer technical support, product repair, education services and support services. These services enable the customers to protect their network investments, manage their networks. Through its education services program, it offers training courses covering network design, installation, configuration, operation, trouble-shooting and maintenance. Its services offering is a program that provides network engineering, configuration, integration, project management and other consultative support.

The Company competes with Alcatel-Lucent, Calix, Huawei and ZTE.