Nortel Networks Corp. (NYSE/Toronto: NT) has unveiled a new long-haul DWDM terminal that it says will meet ongoing demand from carriers worldwide (see Nortel Expands LH Portfolio).

The OPTera Long Haul DT transports multiple DWDM channels in carrier networks from optical switches to a range of multiservice platforms, including Sonet (Synchronous Optical NETwork) and SDH (Synchronous Digital Hierarchy) gear, Asynchronous Transfer Mode (ATM) equipment, routers, and Internet Protocol (IP) switching platforms. It's clearly a replacement for Nortel's existing OPTera Long Haul 1600, though the vendor's loath to promote it that way (more on that in a minute).

So, you ask, why launch a new long-haul product when it appears that carriers aren't buying nuttin'? Well, part of the strategy is that the product could work as an incremental upgrade. Even if capex isn't increased right away, the gear could enable carriers to add more DWDM channels and greater reach without swapping out amplifiers or other gear.

"Nortel is trying to position [the DT] as something carriers can fit into their network of deployed equipment," says David Krozier, long-haul analyst at RHK Inc.

"We see an ongoing requirement for more channels," says Philippe Morin, general manager of optical networks at Nortel. He says the new box is aimed at existing networks, but it also offers a better basis for new buildouts where they're occurring. Right now, that's primarily in the Asia/Pacific region.

Take Australia's Optus Networks Pty. Ltd., for instance, which intends to use the new DT for part of its already-announced Nortel deployment, worth $175 million (see Optus Selects Nortel).

Oddly, Nortel insists the DT isn't a replacement for "anything" in a carrier's network. Indeed, Morin must be pressed to admit it's likely to supersede the vendor's OPTera Long Haul 1600. He prefers to say it's a "complement" to existing networks.

Still, the DT outperforms the 1600 in a number of ways: Nortel spokespeople say it is denser than the 1600 and uses less power. It has an optical reach of 1,500 km, compared with the 1600's 1,200 km.

Given this, it's tough to see why any carrier would want to keep the 1600 around if the DT was available -- that is, if the carrier was in a position to spend on an upgrade.

The DT reflects Nortel's faith that enough carriers will be opening their wallets to make that little improvement to their installed base. Clearly, Nortel's planning to mine revenues from its established position in worldwide long-haul DWDM networks -- even as its chief rivals in that market segment, Alcatel SA (NYSE: ALA; Paris: CGEP:PA) and Lucent Technologies Inc. (NYSE: LU), have lately been focusing on metro, access, and integration services (see Russo: Lucent's Getting Steady and Alcatel Joins CWDM Club).

Nortel's not alone in thinking the long-haul market may not be doomed as a locus of bubbleheaded overbuild. "The idea that long haul is dead is a lot of baloney," said Mark Lutkowitz, VP of optical networking research at Communications Industry Researchers Inc., in a conversation unrelated to Nortel last week. One indication, he says, is legislation that promotes the buildout of long-distance services for RBOCs (see RBOCs Get Long Distance Go-Ahead).

— Mary Jander, Senior Editor, Light Reading