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CIENA EXPANDS PRESENCE IN EUROPE AS DATA TRAFFIC GROWS

Ciena Corporation (NASDAQ: CIEN),one of the world's leading suppliers of bandwidth solutions to the telecom industry, has announced its continuing expansion of operations in Europe. Ciena, which specializes in dense wavelength division multiplexing (DWDM) technology, has opened an office in Paris.

The company is responding to Europe's strong growth in data traffic, a result of the Internet and telecom de-regulation. The new Paris office, located at ``La Grande Arche'' - La Defense, was made necessary by the significant growth in Ciena's international business which has seen an increase from approximately 5% of overall revenue in fiscal 1997 to 23% in 1998. The office will serve clients in Central and Southern Europe.

DWDM expands the carrying capacity of fiber optic networks by dividing a single optical signal into several optical channels or wavelengths. Fiber without DWDM carries up to 32,000 voice or data transmissions, but Ciena's DWDM products, already deployed in Europe, increase this capacity by up to 40 times to almost 1.3 million transmissions. DWDM allows telecom carriers to carry more telecom traffic without having to lay new cable or upgrade existing networks.

``As competition increases, both established and new telecom carriers need to offer more capacity as quickly and as cost effectively as possible,'' said Didier Mathevon, of Ciena Europe. ``DWDM satisfies both of these requirements while optimizing network capacity for data, which will soon surpass voice in volume. Therefore, DWDM and related optical technologies overhaul the fundamental design of today's network. This is the beginning of the gradual transformation of the network from all-electronic to all optical.''

As data traffic grows, more European networks are becoming ATM or IP-based. Ciena's technology allows ATM switches and IP routers to connect directly to the optical network, eliminating the need for SONET-SDH equipment in data centric networks and creating a more simplified and cost-effective solution.

Virtual Private Networks

The flexible nature of DWDM networks also allows the technology to break into new markets. ``We are seeing telecom providers entertaining the idea of establishing Virtual Private Networks (VPNs) on a wavelength per customer basis,'' said Mathevon. ``This is the beginning of private Intranets/extranets on demand. Data rate independent, these are gigabit/fast ethernet, ATM or other high speed protocol, private networks.''

``Indeed, our customers take that as an opportunity to start selling services based on native customer protocols. So there is no need to learn new networking technologies. Optical technology enables customers to capitalize on this opportunity by offering the ability to add, drop, and cross-connect DWDM wavelengths -- a function well beyond DWDM's original role of expanding fibre optic capacity.''

Ciena in Europe

Ciena began European operations in June 1997, having secured a contract to supply Cable & Wireless Communications in the UK. Ciena estimates it claimed the majority of the European DWDM market in 1998. Clients include Cegetel (France) and Racal Telecoms (UK). Ciena is also the principal provider to HERMES Railtel Europe, which has a pan-European fiber optic network containing the largest deployment of DWDM technology outside the United States.

``Right now, we're seeing Germany, Spain, France and the UK as the fastest growing markets for this technology,'' said Mathevon. Ciena intends to double the staff at its Paris office in coming months, but expects that the majority of its European engineers will continue to be based at its customers' sites. The company also recently opened offices in Brussels and established its European, Middle East and Africa (EMEA) Headquarters in Central London.