Lucent and TeraBeam to launch fibreless network

Lucent Technologies and internet access provider TeraBeam Networks have announced plans to develop a fibreless optical network system that carries data on beams of light instead of radio signals.

The two companies will form TeraBeam Internet Systems with Lucent taking a 30 per cent stake and TeraBeam owning the remainder.

Under the agreement, Lucent will invest cash, research and development resources, intellectual property and free space optical products valued at $450m. TeraBeam will contribute research and development, intellectual property, free space optical products and manufacturing.

Dan Hasse, chief executive at TeraBeam, said the company's technology is optic but doesn't use fibre optic cable. TeraBeam equipment looks similar to a satellite TV system, beaming information to circular dishes that are mounted on the sides of buildings and connected directly to office data networks.

Hasse also said the existing TeraBeam technology is "hundreds of times faster than T-1 lines - it runs at gigabit speeds". The company will face strong competition from Cisco Systems and Nortel Networks.

"Businesses are struggling to connect high-speed local area networks with ultra high-speed backbone networks due to the last mile bottleneck," said Chris Nicoll of Current Analysis. "Lucent is getting some technology very quickly, instead of having to develop it on its own, as well as a ready-made customer."

A prototype of the service has been in trials for the past 18 months, and TeraBeam said it plans to roll out the service in three cities by the end of the year. The company plans to target national and international markets over the next four years.

Separately, Lucent said it will invest $150m over three years to expand its optical networking production facility in Ireland. The new expansion is expected to shorten product shipment times to European and Asian markets.