Ciena eyes the treasure trove of BEAD money, gets into access business

  • Ciena has offered fiber optic products for middle-mile networks for many years
  • So its decision to get into fiber broadband access was 'a natural extension'
  • The vendor was at the Fiber Connect show this week, showing off its access products

FIBER CONNECT, NASHVILLE — Ciena is well known in the telecommunications space as an optical transport vendor, but when the company saw all the money becoming available from the Broadband Equity, Access and Deployment (BEAD) program, it wanted to get in on that action. 

About two years ago, the company made the decision to get into the fiber access business to homes and businesses. On its most recently earnings call, Ciena CEO Gary Smith said that investments in fiber broadband access, fueled by "massive public funding around the world," are projected to grow the 10G and above PON market by a 55% CAGR to approximately $7 billion by 2027.

To that end, Ciena was at the Fiber Broadband Association’s Fiber Connect conference this week, where the excitement around BEAD was high.

Kevin Sheehan, Ciena’s CTO of the Americas, said, “We’re relatively new to broadband access.” He noted that Ciena made a couple of acquisitions in 2022, buying Tibit Communications and Benu Networks, after assessing the opportunities that BEAD presented.

“We made these acquisitions to extend our optical technology out to the home,” he said.

Ciena has been supporting middle-mile and long-haul networks for many years, and Sheehan said access was “a natural extension” and “complementary to everything else Ciena does.”

The company’s access offerings include optical network terminals (ONTs), optical line terminals (OLTs), routers and switches. While Ciena was motivated to get into this business because of BEAD in the U.S., it offers its residential and business fiber access products globally.

Its main competitors in fiber access in the U.S. are Nokia, Calix and Adtran.

Standing out

Asked how it differentiates from its competitors, Sheehan said Ciena has some purpose-built solutions designed specifically for challenging rural locations that would be appropriate for BEAD projects.

For instance, at the Fiber Connect show it was showing its XGS-PON pluggable optical line terminals (micro-OLTs).

Sheehan explained that OLTs often go in central offices or in remote terminal cabinets. But the micro OLTs can be hung on telephone pole strands. “It’s actually a full OLT on a plug,” he said. “Imagine on a router or switch there are these little connectors to connect to the network. The plug slides into the router and gives a router full OLT capabilities.”

In late 2023, Ciena said it was teaming up with electronics manufacturer Flex to build its pluggable OLTs in the U.S. to comply with the BEAD program’s Build America, Buy America (BABA) rules, which require grant awardees use products and materials that contain at least 55% domestic content.

Ciena pluggable
Ciena's pluggable OLT (Ciena)

While Ciena’s competitors have struggled with backlogs of inventory due to all the stockpiling that their customers did during Covid, Ciena’s residential broadband business has not had that problem because it’s so new.

Sheehan said it’s been relatively smooth to introduce Ciena’s new access business because the company already has an experienced sales force with many relationships due to its years of selling middle-mile solutions. That same sales force can talk to customers about residential broadband.

And the access business already has some customers, including the service provider Micrologic in West Virginia.

So, how much exactly is Ciena looking to gain from BEAD deployments? It looks like we'll have to wait and see. A company representative told us it's "too soon" to share a revenue target for BEAD-funded projects.