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NewsGlobe: Currents
BBWF: AlcaLu goes META about mobile backhaul
And Rahier defends credentials of beleaguered wireless division
by Ken Wieland
Michel Rahier, recently appointed president of Alcatel-Lucent’s
carrier business group, was in a defiant mood at the BBWF
event in Berlin.
In a one-man show at the supplier’s press conference, he
unveiled META (mobile evolution transport architecture),
Alcatel-Lucent’s all-IP mobile backhaul solution, and stoutly
defended the credentials of the supplier’s struggling wireless
business (see
Wireless woes at AlcaLu).
“Just like our TPSDA [triple-play service delivery platform] for
the wireline world, META is designed to reduce complexity and
congestion in the mobile world,” he says.
Rahier believes the pressure on mobile operators to reduce
costs, by using an Ethernet and IP/MPLS platform, is
increasing mobile data traffic volume which is growing faster than
ARPU.
The META platform includes Alcatel-Lucent’s 7705 service
aggregation router, as well as a microwave option to evolve
from TDM to packet networks.
Alcatel-Lucent has not announced any customers for META,
although it is already in trials with 80 operators. Rahier claims
mobile operators can achieve opex savings of up to 40 percent with
an all-IP network compared with a TDM-based architecture.
Stephane Teral, a principal analyst with Infonetics, is skeptical
META will have a significant effect on Alcatel-Lucent’s wireless
fortunes. “To achieve the opex savings [of an all-IP network]
requires a lot of additional capex, which operators haven’t
got,” he says. “The problem for mobile operators is that they
haven’t yet managed to monetize 3G data traffic. They’re not
ready to jump into something like META.”
Femtocell extensions
While META is designed for mobile operators’ backhaul
requirements, Rahier sees near-term opportunities to
integrate femtocell interfaces with residential home gateways.
This, he says, would be the “logical progression” for META as
it would extend the IP network right up to the customer.
Many mobile operators are evaluating the business case for
femtocells, or indoor base stations, which can hand over 3G
traffic onto fixed-line broadband connection within the home
(which reduces operators’ opex).
The main sticking point for the femto business case is the
high cost per unit. Rahier says Alcatel is working with 2Wire, a
residential gateway manufacturer, to integrate femto and ONT
(optical network termination) interfaces into one box. “You
can achieve significant cost reductions per unit by putting
everything together,” says Rahier.
Rahier doesn’t say how significant those cost-reductions would
be but expects shipments of residential gateways (with femto
interfaces) to begin in the first half of next year.
Wireless wobbles
It has been a turbulent year for Alcatel-Lucent with three
profit warnings already issued since the merger last
December.
Speculation has mounted in the mainstream press that
Alcatel-Lucent’s grip with key wireless customers in the U.S.
(AT&T, Verizon and Sprint) is slipping, primarily due to pricing
pressure from competitors, and Nomura has estimated that
the supplier’s wireless division will make a US$1.12 billion
operating loss this year.
Rahier, while admitting there has been “little pricing relief”
from rivals since the merger, insists Alcatel-Lucent’s wireless
portfolio is strong and has the confidence of its
customers. “We wouldn’t have won recent W-CDMA contracts
with SFR and Telecom New Zealand otherwise,” he argues.
To counter suggestions that Alcatel-Lucent’s wireless presence
in the U.S. is on the wane, Rahier points to the $6 billion
contract that Alcatel-Lucent won in March 2007 with Verizon
Wireless to expand its CDMA-based 3G network. “There is
some fixed-line equipment as part of the contract, but the
majority [85 percent] is for CDMA,” he says.
Infonetics’ Teral is not convinced the Verizon Wireless contract
is necessarily a vindication of Alcatel-Lucent’s CDMA
capabilities. “Most of the work done by Alcatel-Lucent so far
on this has been on the fixed side,” he says. “Verizon doesn’t
seem to be in any rush to expand its CDMA network.”
Teral also believes that Verizon Wireless is seriously weighing
up its options about whether to continue with CDMA as it has
a more expensive migration path to 4G (WiMAX and LTE)
than W-CDMA.
Rahier says that Alcatel-Lucent is investing heavily in LTE
(ready for the 2010-11 timeframe), which includes backing
mobile WiMAX (which uses the same OFDM technology as
LTE). Alcatel-Lucent says it has 18 and 20 customers for
mobile WiMAX.
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