Alcatel-Lucent and Ericsson

clinch AT&T deal to secure North

American foothold in LTE
Julian Bright
15 February 2010
Alcatel-Lucent and Ericsson have struck a blow to Nokia
Siemens Networks with a big LTE win, with AT&T. The
contract is especially important for Alcatel-Lucent, which
continues its resurgence in North America.
AT&T Wireless and Alcatel-Lucent have each had their problems to
overcome in the past couple of years. Although AT&T says it has the fastest-
growing 3G network in the country, and it has benefited from its association
with the iPhone, its network coverage has been criticized as being too spotty.
And Alcatel-Lucent, long a CDMA power, has had to reinvent itself as LTE
has taken hold as the next-generation technology of choice.
Both companies, alongside Ericsson, should benefit from their latest alliance.
AT&T has chosen to go with its existing network-vendor partners, Alcatel-
Lucent and Ericsson, for the rollout of a national LTE network in the US.
The operator has selected the vendors to supply it with radio-access-network
equipment under a multiyear agreement, and it will begin LTE trials with the
two suppliers later this year. A commercial launch of LTE services is planned
for 2011. The financial terms of the agreements have not been disclosed.
The two vendors are supplying equipment for AT&Ts 3G network, and the
operator says the decision will enable it to take advantage of compatibility
between the suppliers 3G equipment and the upgrades for LTE. Starting this
year, 3G equipment and software delivered to AT&T by the two vendors will
be fully upgradeable to LTE.
Ericsson and Alcatel-Lucent were also selected in early 2009 to provide
equipment for Verizon Wireless initial LTE-network deployments in a deal
lasting until mid-2010, when the operator will seek tenders for the next phase
of its LTE rollout.
AT&T claims to have the fastest-growing 3G network in the US, though it has
suffered recently from adverse publicity regarding network coverage for the
iPhone and at the hands of aggressive marketing by rival Verizon Wireless
regarding its relative lack of national 3G coverage.
AT&T said in a 4Q09 results briefing that it plans to spend US$18-19 billion
on its wireless network in 2010, compared with US$17 billion in 2009. This
investment will include a focus on groundwork for LTE, on improving overall
capacity and performance and on HSPA coverage at 7.2Mbps in metro areas
with high-volume demand.
The LTE announcement looks like a blow to Nokia Siemens Networks, which
supplies both GSM and WCDMA/HSPA equipment to AT&T, said Mike
Roberts, a principal analyst at Informa Telecoms & Media. NSN did, however,
recently win a share of TeliaSoneras national LTE rollout, along with
Ericsson. That was a tough deal to win, because NSN had to beat out Huawei,
which along with Ericsson supplied LTE equipment for TeliaSoneras initial
rollout in Oslo and Stockholm, Roberts said.
But the AT&T deal is a big win for Alcatel-Lucent, he said. There have been
questions about whether the vendor could hold onto its existing WCDMA/
HSPA customers, such as AT&T, as they transition to LTE, due to the
perception that Ericsson and Huawei are becoming the leading LTE RAN
vendors and because of Alcatel-Lucents relatively weak position in the
WCDMA/HSPA market, he said.
The AT&T deal gives Alcatel-Lucent a shot at retaining its strength in the
North American networks market despite the decline of CDMA, since it now
has a share of the LTE rollouts of the top two operators, Verizon Wireless
and AT&T, Roberts said. It also gives Alcatel-Lucent a great reference in the
WCDMA/HSPA market, he said. Now the challenge will be to win deals
outside North America, one of its traditional strongholds.
Alcatel-Lucent is providing AT&T with LTE base stations, element-
management systems, engineering and installation services and a network-
management system. Field testing of the LTE network will include handover
and in-building testing on a dual-band network using AWS and 700MHz
frequencies.
However, the vendors newly launched MC-TRX, a software-defined radio
module capable of simultaneously supporting 2G, 3G and LTE, is not part
of the initial agreement with AT&T, according to Alcatel-Lucent, though a
company statement said the contract included elements of our converged
RAN portfolio. Alcatel-Lucent recently contracted to supply the MC-TRX
as part of a converged RAN network for an LTE trial being conducted by SFR,
a customer for its WCDMA base stations.
Alcatel-Lucent says that, space permitting, the MC-TRX can be installed in
any of its own base stations deployed by a service provider since 1999, thereby
providing an upgrade path to LTE. The company estimates this installed base
to be more than 700,000 units covering GSM and 3G.
As well as serving existing Alcatel-Lucent customers, the new module
will also provide opportunities for Alcatel-Lucent to completely replace the
aging installed base of its competitors, says Jean-Louis Hurel, consultative
marketing director for wireless networks at Alcatel-Lucent.