A broader network view

Alcatel Network Systems gains mobile switching The U.S. arm of Paris-based Alcatel has added a little more muscle. Alcatel Network Systems recently absorbed Alcatel Engineering and Service Center, a mobile switching unit based in Bethesda, Md., into its operations.

The subsidiary, which has been renamed the mobile switching group of Alcatel Network Systems, manufactures mobile switching platforms based on the Alcatel 1000 S12 switch.

The move signals Alcatel's commitment to create a full hardware line for the United States market under a unified banner.

"One of the motivating factors was the rising interest of operators in full turnkey solutions," said David Owen, vice president and general manager of the division. The absorption of the operation into Network Systems was actually the second step in redirecting his unit's focus. Until about six months ago, the Engineering and Service Center had been owned by a German subsidiary of Alcatel, which meant that its focus was primarily on Europe. "What we were doing from a product standpoint was an adjunct or a footnote to Alcatel's worldwide product focus," Owen said. "The business here is interesting enough and potentially big enough that we wanted to make it an American operation, focusing on the American market."

Krish Prabhu, president of Alcatel Network Systems, said Alcatel wants to build on its transmission base in the United States. The plan is not only to incorporate its wireless switches into its current products, but also to act as an independent switch vendor, selling to mobile access suppliers that don't have competitive switches.

By the same token, as a unit of Network Systems, the mobile switching operation will be able to capitalize on Alcatel's connections.

"The advantage for potential customers is that when they have needs outside the pure mobile switching environment, we're going to be able to help them much better than before," Owen said.

Some analysts didn't see the announcement having a huge influence in the U.S. mobile switching market. Harry Young, vice president of The Strategis Group in Atlanta, said the market is already dominated by Ericsson, Lucent and Nortel. "I think they'll have a difficult time," Young said.

That is despite the affiliation with Alcatel subsidiary Hughes Network Systems. The 1000 S12 is part of a Hughes platform used by BellSouth Cellular, but "Hughes is only a player because of BellSouth," Young said. But PCS operators, particularly smaller ones, may offer the growth opportunity that the new division needs, he added.

Alcatel executives expect the division, which will focus on engineering, developing, installing and managing systems involving AMPS, time division multiple access and code division multiple access technology, to flourish as a network systems division.

Owen said the division will expand to include even batteries and rectifiers used to power wireless networks. When it was owned by the German company, "there wasn't as much commitment to include the [entire] Alcatel product portfolio," Owen said.

And no longer having to communicate with and operate through a European parent should make operations more efficient.

"We want to tap the resources of Alcatel Network Systems," he said. "We're already seeing a tremendous outpouring of resources from Network Systems." That means business connections with wireline carriers.

"We're hoping that the relationship will create those kinds of opportunities," Owen said. "We're hoping to be able to use their sales force and get into that business as well. The line between wireless and wireline operators is going to become increasingly blurred."

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