Tellium

About Tellium

Founded in 1997, Tellium emerged as a key player in the telecommunications equipment sector, specializing in the development and manufacturing of optical switching technology. The company's primary offerings included the Aurora Optical Switch and the accompanying StarNet Software Suite, which were designed to manage the flow of optical signals in carrier networks. The Aurora switch, aimed at long-haul and core optical networks, provided OC192 (10 Gbit/s) grooming capabilities, enabling it to handle high-capacity traffic for major telecommunications companies like Qwest Communications and Cable & Wireless.

Tellium's business model centered on supplying high-capacity equipment to network service providers navigating the increasing demand for bandwidth. A significant milestone for the company was securing a $250 million equipment contract with Extant, a network operator. In May 2002, the company introduced the StarNet Optical-VPN, a software solution that allowed carriers to partition their optical networks into secure, virtual pipes for their customers, offering guaranteed performance rates. This product was a part of the StarNet Optical Services, a management software package for the Aurora switches.

Financially, Tellium raised $50 million in a venture debt round in January 2000, with participation from investors such as Oak Investment Partners, Worldview Technology Partners, and Cisco Investments. However, the company faced financial challenges, reporting a net loss of $12.1 million on revenues of $10.1 million for the second quarter of 2003. In a strategic move to leverage its intellectual property in all-optical switching, Tellium acquired Astarte Fiber Networks, a designer of photonic fiber-optic matrix switching systems. Ultimately, in July 2003, Zhone Technologies initiated a reverse merger with Tellium, a deal valued at approximately $180 million, which was completed in November 2003.