Braun has grander vision for Harris Stratex than backhaul

Harald Braun

A lot has changed at Harris Stratex Networks (NASDAQ:HSTX) in the year since Harald Braun took over as chief executive officer.  When the former Siemens Communications’ networks President joined Harris Stratex, the company was focused primarily on IP mobile backhaul, but it’s beginning to resemble the end-to-end supplier that Braun left. In the last year, Harris Stratex has either bought or built a full complement of radio access and core products that allow it to offer its customers for the first time a full network solution.

In the last year, Harris Stratex first partnered and then purchased WiMax radio equipment vendor Telsima, it has designed its own access service network (ASN) gateway and developed a network management system. Combing those elements with its primary mobile backhaul business, Braun believes Harris Stratex is in a position to do what it’s never done before: sell a single end-to-end wireless network solution to operators. And here in the US, Braun has a good idea of who those first customers might be: Tier II, Tier III operators and government entities going after broadband stimulus dollars.

While its large list of Tier I customers—AT&T (NYSE:T), Verizon Wireless (NYSE:VZ, NYSE:VOD), Sprint (NYSE:S) among them—are still very much within the vendor’s sights, they will always split their contracts between suppliers, coming to Harris Stratex specifically for backhaul gear, Braun said. The smaller operators though are looking for that single-throat-to-choke vendor, though, and Braun believes Harris Stratex has several key advantages to becoming that throat.

Braun first pointed to Harris Stratex’s success in the developing markets, not only with its backhaul equipment but Telsima’s WiMax product line. 30% of Harris Stratex’s business is now with major operators in  Africa, and in South Asia it has landed impressive regional WiMax network deals with two of the regions powerhouses, Reliance Communications and Tata Communications (NYSE:TCL). What do deployments huge developing cities have to do small communities in the American farm belt?

“In some areas in North America, broadband conditions are very much like the emerging markets,” Braun said. “Many people just have dial-up modem or no access to data services whatsoever. … We see drivers of the emerging market and the drivers of broadband stimulus as being the same: lack of infrastructure, the lack of availability of high-end multimedia. Both the emerging markets and rural America share the same desire to participate in the communications world.”

Secondly, Braun feels the fact that Harris Stratex is the one of the few—Braun claimed “only”—suppliers based entirely in the US that can provide a complete network. The ‘buy American’ provisions of the broadband stimulus package have been largely watered down, exempting access, routing and even customer premise equipment from the rule. The rules for Rural Utility Service (RUS) and National Telecommunications and Information Administration (NTIA) funds, however, did place a premium on ‘middle mile’ backhaul services, Harris Stratex’s primary business. Even though the rules don’t prohibit foreign equipment, Braun said, there will still be a political pressures to spend those stimulus dollars on American-made gear.

“It would be a problem to see that money go abroad and not help the US economy,” Braun said. “I think the program would fail. It wouldn’t stimulate any US jobs.”