Tellabs, Inc. - Communications Equipment -  Category Main Page 

One Tellabs Center

1415 West Diehl Road

Naperville, Illinois 60563
(630) 798-8800

www.tellabs.com

Sales

$980 million

Business Description 
Tellabs, Inc. and its subsidiaries design and market communications equipment to telecommunications service providers worldwide. We also provide installation and professional services that support our product offerings.

Our products include solutions for next-generation optical networking, managed access, carrier-class data, voice-quality enhancement and cable telephony. For financial reporting purposes, the carrier-class data, voice-quality enhancement and cable telephony products are combined and referred to collectively as Other Products.

Our products are sold in the domestic and international marketplaces (under both the Tellabs name and trademarks and under private labels) through our field sales force and selected distributors. Our customer base includes incumbent local exchange carriers (ILECs), independent telephone companies (ITCs), interexchange carriers (IXCs), local telephone administrations (PTTs-post telephone and telegraph administrations), other local exchange carriers (LECs), original equipment manufacturers (OEMs), cellular and other wireless service companies, cable operators, alternate service providers, competitive local exchange carriers (CLECs), Internet service providers and system integrators.

OPTICAL NETWORKING SYSTEMS

Our optical networking systems are designed to help service providers reduce operating costs, generate greater revenues and efficiently manage bandwidth. Our optical networking systems consist of digital cross-connect, transport switching and optical transport systems.

Optical networking increases the capacity of the fiber in a network, enabling service providers to carry more of their customers’ voice, data and video signals over the same infrastructure. Optical networking relies on wavelengths and fibers to move massive amounts of voice and data. A wavelength can carry voice, video or data traffic from an optical carrier (OC)-3 or synchronous transfer mode (STM)-1 (up to two thousand simultaneous phone conversations or Internet connections) up to OC-768 or STM-256. A fiber can carry anywhere from one to 160 wavelengths, depending on the type of equipment used to terminate the fiber.

Our optical networking systems consist of technologically sophisticated digital cross-connect, transport switching and optical transport systems. These transmission systems are designed to meet or exceed domestic and international industry standards. Product offerings include the Tellabs® 5000 series of digital-cross connect systems, the Tellabs® 5500NGX (formerly the Tellabs® 6400) series of transport products, the Tellabs® 6500 transport switch and the Tellabs® 7100 series of optical transport systems.

A digital cross-connect system is a high-speed data channel switch, which connects transmission paths based on network needs, rather than call-by-call. Digital cross-connect systems manage and route network traffic and combine, consolidate and segregate signals to maximize efficiency. The Tellabs 5000 series of digital cross-connect systems operate under software control and are typically used to build and control the narrowband and wideband transmission infrastructure of telecommunication service providers. These products augment the ability of service providers to provide current, emerging and future wireline and wireless services to business and residential customers.

Telecommunication managers utilize the digital cross-connect systems to generate revenue and to reduce cycle time while minimizing capital and operating expense. Key applications include centralized and remote testing of transmission facilities, grooming of voice, data, and video signals, automated provisioning of new services and restoration of failed facilities.

The Tellabs 5000 series of digital cross-connect systems vary in switching rate and facility interface speed. The Tellabs® 5300 line of narrowband cross-connect systems is the highest density narrowband system on the market with the ability to satisfy small cross-connect application requirements. More than 1,000 Tellabs 5300 systems have been implemented in wireless/mobile networks. Our flagship Tellabs® 5500 digital cross-connect system is one of the industry’s highest capacity wideband digital cross-connects. The system efficiently grooms voice and data traffic over a SONET-based network. More than 4,100 Tellabs 5500 systems have been deployed in a variety of networks including local telephone, long distance, wireless, private and emerging networks across the United States. With its scalability and carrier-class architecture, the Tellabs 5500 system helps service providers reduce equipment and maintenance costs while maximizing network profitability.

The Tellabs 5500NGX product line, obtained in the acquisition of Ocular Networks, Inc., is also designed for use in the metropolitan (metro) optical networking market. The Tellabs 5500NGX transport switch increases network utilization efficiency by integrating cross-connect technology, add-drop multiplexing (ADM) and highly efficient data switching for Internet protocol (IP) and Ethernet traffic.

The Tellabs 6500 transport switch is a broadband transport platform that performs ADM and cross-connections at higher speeds than the Tellabs 5500 series products. The Tellabs MetroVantage™ solution extends this capability to remote locations via metro aggregation/backhaul and virtual cross-connections. The Tellabs 6500 system’s redundant, carrier-class architecture ensures reliability during operation and service continuity during system expansion.

The Tellabs® 7100 optical transport system is designed for use in the metro optical networking market, to enable service providers to deliver high-speed wavelength services, helping to alleviate the bandwidth bottlenecks. The system accomplishes this capability by utilizing dense wavelength-division multiplexing (DWDM) technology to increase the capacity of a network. DWDM is the process of increasing the amount of traffic a single fiber can carry. The Tellabs 7100 system utilizes DWDM to increase an individual fiber’s capacity up to 32 times and enables end-to-end fiber and lightpath management.

The Tellabs® 7120 NGX advanced transport node is an OC-192 next-generation synchronous optical network (SONET) multiplexer supporting STS-1 cross-connection and Ethernet data transport capabilities. It is ideal for access and transport in wireless, wireline, or cable operator networks. It has the highest density and lowest power consumption in the industry, easily scales, and enables delivery of new Ethernet services over existing SONET infrastructures.

Optical networking system products accounted for approximately 43%, 44% and 55% of sales for 2003, 2002, and 2001, respectively.

NEXT-GENERATION SDH AND MANAGED ACCESS

Our next-generation synchronous digital hierarchy (SDH) and managed access systems consist of managed access and transport systems used to deliver wireless and business services. These products include the Tellabs® 8100 series and Tellabs® 6300 series of managed access and transport systems and the Tellabs® 6370 (formerly the Tellabs® 7200) optical transport system. These products and systems are designed to accommodate ETSI (European Telecommunications Standards Institute) interface standards not generally used in North America.

The Tellabs 8100 series of managed access systems is designed for the connectivity services segment of the overall Europe, Middle East, Africa, Asia Pacific and Latin America business services market, which includes business-class Internet connectivity and managed data networks. The Tellabs 8100 managed access system is also a leading mobile transmission system. It is currently deployed in more than 250 networks around the world, providing intelligent transport for mobile services and multi-service platforms for a broad range of business services. For mobile operators moving to 3G service provision, the Tellabs 8100 managed access system offers a highly effective way to integrate new packet- and cell-based technologies in the radio access network and a smooth evolution path to IP and asynchronous transfer mode (ATM) core networking.

The Tellabs 6300 series includes edge nodes (the Tellabs® 6310 and the Tellabs® 6320 product lines); the Tellabs® 6330 core node; the Tellabs® 6340 switch node, a next-generation multi-service provisioning platform (MSPP) that meets carriers’ needs for new high-speed data solutions; and the Tellabs® 6350 transport switch, a multipurpose platform offering faster services, including high-capacity 4/4/1 cross-connection suited for various data, voice and leased line applications, and offers interfaces such as Gigabit Ethernet and integrated DWDM.

The Tellabs 6370 optical transport system is an international-oriented DWDM platform, which enables operators to reduce operational costs and simplify network planning. It provides multi-wavelength optical add/drop, integrated SDH interfaces, and open transponder interfaces that support Gigabit Ethernet, ESCON, ATM and IP applications. The system features plug-and-play installation (SmartStart) which reduces installation time and eases procedures.

Next-generation SDH and managed access products accounted for approximately 28%, 22% and 18% of sales in 2003, 2002 and 2001, respectively.

OTHER PRODUCTS

Our Other Products include carrier-class data solutions, voice-quality enhancement (VQE) and cable telephony products.

Our acquisition of Vivace Networks brought two complementary new products to Tellabs that, together with the new data products being developed in Finland planned for release in 2004, enable us to expand into the high-growth multi-service router and edge router markets.

The Tellabs® 8800 series of intelligent multi-service routers (MSRs) enable carriers to leverage existing infrastructure to cost-effectively migrate existing Frame Relay and ATM data networks to new profitable IP and multi-protocol label switching (MPLS) services of the future. The series includes the Tellabs® 8820 and Tellabs® 8860 MSRs, which enable service providers to seamlessly evolve their network to profit from new data service opportunities while simultaneously protecting the profitability of their existing services.

Our voice-quality enhancement systems consist primarily of the Tellabs® 3000 family of broadband and narrowband echo cancellers and Tellabs voice-quality enhancement solutions that enable wireless and wireline providers to improve voice quality in long distance, wireless and private networks. The Tellabs 3000 series of echo cancellers operate in a variety of network environments to ensure that a subscriber’s phone call is echo-free. The VQE solutions are application-specific software that operate seamlessly with the Tellabs 3000 family of echo cancellers to optimize voice clarity for improved customer satisfaction. Tellabs VQE products primarily address the needs of wireless operators, ILECs, IXCs and PTTs. Over 300 customers in 70 countries rely on Tellabs echo canceller and VQE solutions.

In the case of wireline customers, the ability to control the clarity of speech quality is becoming more and more difficult, because of the deregulation of networks and the move from circuit-based to cell- and packet-based networks. These networks introduce delays and other issues that are not present in circuit-based calls, such as inconsistent speech-level control during calls. In the case of wireless operators, to compete with wireline operators for call revenues, the clarity of a mobile call must be as good as a wireline call. These changes have resulted in a move away from pure echo cancellation, to providing echo cancellation as a platform for voice-quality enhancing software, such as level control and noise reduction. This development in the market has opened up opportunities, not just to provide solutions to the wireline and wireless operators worldwide, but also to the manufacturers of telecommunications products worldwide, who integrate these voice-quality enhancing solutions into their products. Competition is driving many wireline and wireless customers to re-evaluate and upgrade their existing infrastructure, based on the voice-enhancing technology solutions now available. Tellabs VQE solutions include Tellabs Noise Reduction (TNR), which reduces background noise in mobile calls; Tellabs Level Control (TLC), which addresses voice level variations by automatically compensating for high or low audio levels on a cell-by-cell basis; and Tellabs Acoustic Control (TAC), which eliminates acoustic echo originating from digital mobile handsets and hands-free kits.

The Tellabs® 2300 telephony distribution system is a multiple services delivery system that enables cable television providers, alternate access carriers and competitive access providers to build flexible communication networks that support the integrated delivery of video, voice, data and information services. The latest domestic upgrade to the Tellabs 2300 telephony distribution system enables multi-line radio frequency sharing to maximize network reliability and decrease the probability of a blocked call.

Other Products accounted for approximately 14%, 20% and 12% of sales in 2003, 2002 and 2001.

PROFESSIONAL SERVICES

In support of our product portfolio, we generate revenue from our services and solutions area. Our worldwide service organization provides customers with high quality technical and administrative product support focusing on meeting the expanding needs of the global customer base. We support our customers with a wide range of services, such as network deployment, traffic management, support services, professional services and training.

Tellabs’ network deployment services enable our specialists to be a single point of contact for the customers, focusing on program management, engineering, material procurement, installation labor and supervision, and acceptance testing.

Traffic management services include our network modernization program, software tools and processes designed to support network upgrades and the transfer of live telecommunications traffic; and our element provisioning program, which gives service providers the ability to accelerate their time-to-market up to 50 percent.

Support services offer network service providers a wide range of options for technical assistance, system maintenance, system performance improvement and skills enhancement.

Our professional services group offers a variety of tailored programs to meet all phases of a network life cycle including operations integration services, highly customizable solutions designed for specific customer needs that enhance the overall effectiveness of operations; and management systems integration services, which help network service providers improve their operations by extending the capability and performance of our network management systems.

We provide Tellabs product warranties for periods ranging from one to five years for the repair or replacement of modules and systems because of defective material or as may otherwise be required under a specific customer contract. We have a replacement service that is used to provide the customer with needed module replacements in response to a time-critical service outage.

Our services group offers a variety of professional and consultative services, including program management, network planning and enhanced product support. These innovative service offerings are designed to augment our basic services and provide value-added benefits to our customers.

Professional services accounted for approximately 15%, 14% and 15% of sales in 2003, 2002 and 2001, respectively.

COMPETITION

Our products are sold in global markets and compete to a great extent on the following key factors: responsiveness to customer needs, product features, customer-oriented planning, relationships with customers, price, performance, reliability, breadth of product line, technical documentation, prompt delivery and emerging technology from new entrants.

The optical networking product systems compete principally with products from Alcatel, Ciena, Fujitsu, Lucent Technologies, Marconi, NEC, and Nortel Networks.

The major competitors in the next-generation SDH and managed access system category are Alcatel, Ciena, Cisco, ECI, Huawei, Lucent, Marconi, NEC, Nortel Networks, Siemens and ZTE.

Competitors for the other products are ADC, Alcatel, Arris, Cisco, Ditech, Juniper and NMS Communications.

Communications Equipment Companies in the Directory

Alcatel

Avaya

Lucent Technologies

Ericsson

Harris Corp.

Marconi

Nortel Networks

Siemens

Tellabs