Nortel pockets third optical firm this year

Nortel is splashing out billions of dollars to acquire an optical networking company for the third time this year.

The telecoms equipment giant will buy CoreTek in a stock-swap deal worth $1.43bn, adding to last week's announcement that it will acquire Xros for $3.25bn, and the $3.25bn purchase of Qtera, which closed in January.

According to Greg Mumford, president of Nortel's optical networks business, CoreTek will help drive the company's efforts to develop all optical networks because it "introduces dynamic flexibility into the optical layer".

CoreTek, which has yet to ship any products, builds tuneable lasers and other optical components that allow wavelengths of light to be changed in real time as it travels through networks. This enables networks to dynamically monitor and re-route traffic.

The components are designed to operate in 10Gbps systems, but there are plans to support 40Gbps and 80Gbps speeds in the future. Initial components are expected to ship at the end of the year, but Nortel executives do not expect CoreTek products to be integrated with Nortel kit until 2001.

CoreTek will join Nortel's other optical acquisitions that include Qtera and Xros. Qtera develops technology that enables phone and data traffic to be sent over fibre optic networks at a distance of up to 2500 miles, but at a lower cost than traditional phone lines. Meanwhile, Xros' 1000 switch redirects beams of light from one piece of glass fibre to another using tiny mirrors.

Clarence Chandran, president of Nortel's service provider and carrier group, said: "We have our sights on the all-optical internet needed to handle the explosion of demand service providers are experiencing."