Equipe Communications, a start-up maker of multi-service core switches, shut down this week after a deal with Lucent fell through following Verizon’s selection of Tellabs as the supplier of next-gen switches for its network.

Equipe had been on thin ice. The company never generated any revenue due to lack of demand for core ATM/MPLS switches as carriers selected routers for the core of their multi-service networks and switches for the edge.

Equipe had to watch from the sidelines as some of its multi-service edge switch brethren were acquired by bigger companies. Another multi-service core switch start-up, Tenor Networks, also shuttered operations last year due to lack of demand for that type of product.

The Verizon contract was viewed as key to Equipe’s survival. The company’s E3200 switch was in trial there and sources say that Lucent was ready to acquire or invest in Equipe if it had won the Verizon deal.

Verizon went with Tellabs instead, sources say. It is unclear which product Verizon selected from Tellabs but it may be the 8800 Multiservice Router, which it obtained via last year’s acquisition of Vivace Networks.

Call to Equipe were not returned by press time. According to the company Web site, it employed 65 people and raised $103 million since its founding in 1999.

Other sources say that Equipe employees and shareholders are receiving letters from the company stating that Lucent is acquiring Equipe's assets and intellectual property for $9.6 million. Lucent declined to comment on "rumor and speculation."