Ciena acquiring Benu Networks, Tibit Communications in fiber broadband market push

Nov. 29, 2022
Through the dual acquisition, Ciena Corp. signals its intention to make a push into the growing fiber broadband and edge networking space.
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Ciena Corp. (NYSE: CIEN) has signaled its intention to make a push into the growing fiber broadband and edge networking space through a pair of acquisitions. The company says it has closed the purchase of privately held Benu Networks, which supplies cloud-native software offerings, including a virtual broadband network gateway. Ciena also has agreed to buy privately held Tibit Communications, Inc., which makes a pluggable optical line terminal (OLT) and in which Ciena already has an ownership stake.

Ciena did not say how much it paid for Benu in the transaction that closed in Ciena’s fiscal first quarter 2023, which is ongoing. The company says it will acquire the shares of Tibit it doesn’t already possess via a cash-free, debt-free transaction currently valued at approximately $210 million, with the merger consideration to be paid in cash. That deal also is expected to close during the current quarter, which will end in January 2023.

“The acquisitions of Tibit Communications and Benu Networks will extend our ability to support customers’ next-generation metro and edge strategies as service providers globally accelerate investments to modernize their networks and improve connectivity at the network edge,” said Scott McFeely, senior vice president, global products and services at Ciena. “Tibit’s high-speed PON technologies and Benu’s subscriber management products, combined with Ciena’s current access and edge portfolio, will enable us to offer broader, more complete, and fully integrated broadband access solutions that combine routing, subscriber management, and PON features and functionality.”

Tibit tidbits

Tibit’s MicroPlug OLT crammed 10G PON OLT functionality into an SFP+ transceiver form factor. The pluggable OLT enables network operators to add PON capabilities to switches and routers, including whitebox varieties, as well as other platforms.

In addition to being a part-owner of Tibit (other investors include Liberty Global, Swisscom Ventures, Intel Capital, Juniper Networks, and Solasta Ventures), Ciena was also the company’s largest customer. But it wasn’t its only customer. For example, Juniper Networks has leveraged its ownership share in the company to offer the pluggable OLT as part of its portfolio. Technetix has added 10G PON capabilities to its product line via the device as well, while Champion ONE partnered with Tibit on an implementation for Syringa Networks. Harmonic also is a customer.

Ciena says it is committed to supporting Tibit's existing customers. A spokesperson at the company said new customers would be welcomed after the acquisition closes as well.

Benu for software

Benu Networks, meanwhile, will strengthen Ciena’s hand in access network software and virtualization. Ciena believes it will now be able to provide an integrated offering that includes routing, OLT, subscriber management, and network services.

“Ciena and Benu have already successfully partnered in the market, including as part of an award-winning joint proof of concept [POC] with other residential broadband ecosystem vendors, as well as on active work on customer trials and POCs globally. As part of Ciena, we will be in a stronger position to further extend the market reach and continued development of our software solutions,” said Ajay Manuja, CEO of Benu Networks.

A big hand for smaller operators

In a blog in which he commented on the announcement, Dell'Oro Vice President, Broadband Access and Home Networking Jeff Heynen stated that while Ciena now has another avenue through which it can engage its Tier 1 communications service provider customers, the deals also position it well to help Tier 2 and 3 operators who hope to expand their networks via the various government broadband funding programs.

"The combination of Tibit and Benu allows Ciena to address smaller operators with a solution that incorporates both access and aggregation in a single platform, with a hardware-abstracted OLT coupled with a vBNG (from Benu) that can more efficiently address localized areas with smaller subscriber counts," Heynen wrote. "This architecture could speed up the deployment of new fiber services in rural and underserved areas and allow service providers pursuing 'edge out' strategies to deploy and connect back to their existing transport networks in a shorter amount of time with less fiber."

Heynen also anticipates a potentially lucrative opportunity with cable MSOs -- the market Harmonic is addressing using the MicroPlug OLT. How the relationship between Ciena/Tibit and Harmonic evolves with the change in Tibit's ownership remains to be seen, he points out.

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