Cisco converges on Sonet router vendor

Cisco yesterday announced that it is buying PipeLinks of San Jose, California. PipeLinks makes Sonet/SDH routers capable of simultaneously transporting circuit-based traffic and routing IP traffic.

Cisco, which already held a minority stake in the company, will acquire the remaining stock with roughly $US126 million in Cisco shares.

PipeLinks will help Cisco's service provider/customer transition to packet-based Internet telephony while utilising their existing Sonet/SDH infrastructure. PipeLinks' Sonet/SDH router is an access device that combines traditional circuit-based traffic with IP traffic in a single device. The router is intended to enable service providers the ability to offer integrated network services for data and voice at the edge of the network.

Combined with Cisco's IOS software, the PipeLinks router is expected to allow service providers to offer new services such as managed Internet access and native LAN services over an existing TDM infrastructure, Cisco says.

In addition, service providers will be able to continue to offer existing services such as leased line and voice transport. The PipeLinks router is aimed at small and medium-sized businesses in multi-tenant building environments.

In connection with the acquisition, Cisco expects a one-time charge against after-tax earnings of between 3 cents and 6 cents per share for purchased in-process research and development expenses in the second quarter of the fiscal year 1999. The acquisition has been approved by the board of directors of each company and is subject to various closing conditions.

PipeLinks was founded in 1996. The 73 employees led by PipeLinks President and CEO Amit Shah will report to Alex Mendez, vice president and general manager, in Cisco's Service Provider line of business.

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