Alcatel-Lucent Wins Big with Verizon
BARCELONA—Alcatel-Lucent today emerged the triple-crown winner in Verizon Wireless’ highly anticipated LTE vendor announcement at Mobile World Congress.
Verizon Communications Executive Vice President and Chief Technology Officer Dick Lynch unveiled the vendors during a morning keynote. Alcatel-Lucent, which found out about the award at the same time everyone else did, was the only vendor to be named in the three areas of IMS, enhanced packet core and radio access network.
Nokia Siemens Networks is another key supplier for IMS, while Ericsson will supply base stations and packet core solutions. Starent also will be a packet core supplier with Ericsson and Alcatel-Lucent.
As expected, the mood at Alcatel-Lucent’s MWC venue was exuberant. The company does not yet know in which markets it will be supplying network infrastructure, but the Verizon win ties in nicely with one of the company’s central messages at the show. “It validates this LTE end-to-end solution that we have been driving at,” said Ken Wirth, president of Alcatel-Lucent’s Verizon business unit.
In November 2007, Verizon announced plans to deploy LTE with Vodafone, which is a joint owner of Verizon Wireless along with Verizon Communications. At the time, the companies identified trial suppliers as Alcatel-Lucent, Ericsson, Motorola, Nokia Siemens Networks and Nortel.
Industry analysts said Motorola and Chapter 11-bound Nortel clearly are the biggest losers. On the operator side, Clearwire is probably more pressured to deploy its mobile WiMAX offering on a wider basis. Lynch said Verizon expects to be in two markets in 2009 and 20 to 30 U.S. markets in 2010.
Using existing spectrum, Verizon and Vodafone have been field testing LTE in Minneapolis; Columbus, Ohio; and northern New Jersey, as well as in Budapest, Dusseldorf and Madrid in Europe, with a variety of network providers. Field trials demonstrated peak download rates of 50 to 60 Mbps; actual average download results will not be determined until the commercial launch.
Verizon expects trials this summer using 700 MHz spectrum, assuming there are no more delays in the DTV conversion.
Lynch said building and offering commercial services over Verizon Wireless’ LTE network while also expanding its FiOS fiber network is consistent and complimentary as consumers begin to expect their devices to work seamlessly across both wired and wireless.
It’s too early to put a dollar amount on the contract win for Alcatel-Lucent or the other vendors. Verizon's total capital expenditures totaled roughly $17 billion in 2008. Lynch in his address noted that LTE network costs would be within the company's overall program as spending shifts from older technologies to new strategic initiatives, such as LTE.
Yesterday, 3G Americas President Chris Pearson said he believes CDMA operators will have a tougher time moving to LTE than the GSM-based operators because CDMA doesn’t have the HSPA or HSPA+ capabilities plugged into their pre-existing networks. For GSM operators moving to HSPA, migrating to LTE is mostly a software upgrade.
But Wirth said he doesn’t buy the notion that it will be especially challenging. “It’s not a forklift,” in changing the network from CDMA EV-DO to LTE, he said. Alcatel-Lucent is one of the primary vendors for Verizon’s EV-DO network as well, and it has done a lot to help Verizon from an operating expense standpoint, he said. The vendor has a network management system for CDMA that is adapted to support new LTE solutions.
Lynch also announced the formation of the Verizon LTE Innovation Center, which will be based outside Boston and is designed to be a catalyst for early development of non-traditional products for use on the LTE networks. The center will focus on helping technology partners bring new LTE-based solutions to market in the areas of consumer electronics, machine-to-machine and business products.
The expectation is dual-mode devices will be developed to work on the EV-DO network as well as LTE; Verizon said it plans to maintain 3G service well into the next decade.