The London, UK-based carrier operates a 30,000km MPLS network across western Europe and into eastern European countries such as Poland and Hungary.

Matthew Finnie, Interoute’s CTO, said that, on its Western European routes, the carrier is endeavouring to get further ahead of demand. He said that its previous model had been to look 12 weeks in advance and build out capacity as required.

However, around the end of last year and beginning of this we started to see acceleration in demand, with RFPs going out for 100Gbps and 200Gbps at a time, he said, adding that the uptick in growth is not restricted to Western Europe. We just got a request for seven STM16 [that’s OC-48 in North American parlance, running at 2.49Gbps] out of the Baltic states, and bear in mind that we act as a gateway for a lot of people into and out of Central and Eastern Europe.

The 22m-euro ($28m) was also motivated by a desire to be more responsive to requests for increased capacity, Finnie went on. Where a good timeframe for provisioning additional capacity was previously four weeks, we wanted to get it down to 10 days.

This is not about opening up new ducts or laying new fiber, of course. We have 48 [fiber] pairs in our network and a good chunk of them are spare, said Finnie. Rather it is adding new optics to light the fiber. Wavelength provisioning has been tough in 2006, so this is new capacity designed to put us ahead of the curve, to enable faster response to customer requirements.

In Eastern Europe, Interoute has until now acquired assets to become a player. In 2004 it bought Central European Communications Holdings BV (Cecom), with networks in Poland, Czech Republic, Hungary, Austria, Germany, Romania and Slovakia, while in August this year it added Bulgaria and additional capacity in Romania with the acquisition of Telecom Partners Network (TPN), the latter enabled by a 125m-euro ($160m) investment in Interoute by Dubai Holdings.

Interoute has traditionally had a dual provider strategy, and Ciena is one of the original two optical vendors, so the contract to upgrade the Central and Eastern European part of the network.

There is some additional capacity and new geographies, said François Locoh-Donou, VP for EMEA at the Linthicum, Maryland-based networking company. Our 10GbE or 10GbLAN PHY carries native Ethernet, so you can carry Ethernet over SONET from the router to our device, which works out three to four times cheaper than a native Ethernet port on a router for the same capacity.

The vendor used in Western Europe, however, is new, Sunnyvale, California-based Infinera having been chosen over the former provider, Alcatel SA, with its SONET/SDH technology. The reason for Infinera’s selection was architectural, in that it uses a single processor with indium phosphide lasers, which Infinera calls Photonic Integrated Circuit (PIC) technology.

This enables a ten-channel wavelength card to be replaced by a single chip, said Finnie, who added that it’s monolithic as against discrete, and it’s digital, which makes it easier to tune. Interoute doesn’t break down the figures, but rumor has it that Infinera took the lion’s share of the contract.