Mr. Tamir: I founded the company with a partner, Eric Paneth, 20 years ago. Our initial business was DSL; we were a pioneer in DSL. In the year 1999 and 2000, we had the second biggest ADSL market share in the world. Our main customers were Verizon, Deutsche Telekom, Telia in Sweden. In the year 2000, we realized that DSL is a very low-margin business and we may not survive financially in this market. So we exited the market and put the company into a new direction, a direction that we are in now - Carrier Ethernet + Transport. We started with a product that combined TDM and Ethernet functionality in the same platform. We came with the first product in 2004.
Our early adopter was KDDI, the second largest service provider in Japan that has 30 million subscribers. KDDI rolled out our product all over Japan, migrating from their legacy NG-SDH platform to future-proof, packet-based Carrier Ethernet + Transport products. By the year 2008, they have rolled out over 2,300 gears delivering residential triple play, Ethernet business services and 3G mobile backhaul traffic. So far revenues from KDDI crossed $200 million, a major success. Actually most of the Metro network of KDDI is built with our equipment. In 2006 we started with the next-generation product in this area. Despite the fact that KDDI was an early adopter, the market is late to develop and we start to see the initial signs of ramp-up now. Nine years or actually 10 years after we started the product development, we see emergence of this market. Our main target market is SDH/NG-SDH replacement. This is a summary in a nutshell.
TWST: What does the competitive arena look like?
Mr. Tamir: Our market is a portion - a slice of the carrier Ethernet market. The carrier Ethernet market is about $2 billion market a year. We are focusing on places where you need TDM and Ethernet in the same platform. We believe that our competitive edge is a breakthrough technology in a very low price point, both from a cap ex and op ex point of view.
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