TeraBeam, Lucent Team On Connectivity Services

SAN MATEO (04/14/2000) - Lucent Technologies Inc. and TeraBeam Networks Inc. last week hammered out a plan to jointly develop and deploy TeraBeam's wireless service, which beams data over the air at gigabit-per-second speeds.

TeraBeam's Fiberless Optical System, which was first announced last month, attempts to solve the last-mile bottleneck of getting data and services from the wide area to local area networks.

In addition to jointly developing TeraBeam's service, Lucent and TeraBeam will create a new hardware company that will deploy TeraBeam's technology, officials for the companies said. TeraBeam will own 70 percent of the company -- called TeraBeam Internet Systems -- and Lucent will hold the remaining 30 percent.

"TeraBeam and Lucent together will provide a wireless metropolitan area network that runs at gigabit speeds," said analyst Christopher Nicoll, director of optical infrastructure at Current Analysis, in Sterling, Virginia. "It should let enterprises see multimegabit and gigabit rate service much more quickly.

Even if streets are getting dug up for fiber optic access, that doesn't necessarily mean that it's bringing service to your building. With TeraBeam, if you want service, they can get it to [you] in a matter of days or weeks."

"This is a very compelling access story [about] how to roll out services very quickly," Nicoll said.

TeraBeam's service uses lasers to beam data wirelessly from strategically located POPs (points of presence) in metropolitan areas to small transceivers that can be mounted in office windows. The company began customer trials last month and will detail further rollout plans next quarter. TeraBeam's CTO said he expects the service to reach 100 markets within four years.

"The relationship with Lucent will help us speed our implementation and will increase the velocity [at which] we are planning to roll out. Having Lucent's installation services worldwide will help us domestically and overseas," said Greg Amadon, CTO and founder of TeraBeam. "Our expectation is [that] we will find a number of synergies and cost reductions in folding their product and technology into ours."

Lucent plans to merge its WaveStar OpticAir point-to-point wireless system with TeraBeam's Fiberless Optical Network system, which is point-to-multipoint.

TeraBeam officials said Lucent's technology will help connect hub stations used to transmit data to users.

According to Nicoll, Lucent's established presence will also help TeraBeam's push into the marketplace.

"TeraBeam has [the] technology to go from the base station to the customer.

What they didn't have was the capability to network the base stations together," Nicoll said. "Lucent brings this [capability], as well as engineering, manufacturing, sales, and service."

Under the terms of the agreement, Lucent will invest cash, research and development assets, intellectual property, and its own free-space optical products, which are valued at $450 million. In addition, all of TeraBeam's products will carry the Lucent brand, officials at the companies said.

Lucent Technologies Inc., in Murray Hill, New Jersey, is at www.lucent.com.

TeraBeam Networks Inc., in Seattle, is at www.terabeam.com.

Breaking the bottleneck

Some advantages of TeraBeam's technology include the following.

* Reduced cost of provisioning bandwidth* Licensed radio frequency spectrum not used* WAN to LAN connection speeds of 1Gbps* Service provisioned in days, not months.

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