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MWC: Winners and losers in Verizon's LTE contest

Analysis: Alcatel-Lucent establishes front-runner status in LTE with Ericsson on its heels; Nortel claims it was Verizon’s 3rd choice; Starent and NSN dig out LTE niches

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For more on Verizon’s LTE deployment and from Mobile World Congress, see Telephony’s Race to 4G and MWC topic pages

Alcatel-Lucent clearly emerged as the biggest winner in Verizon’s Long-Term Evolution (LTE) contest. While Verizon spread the contract around, giving Ericsson pieces of the radio access network and core, Nokia Siemens Networks a hand in Verizon’s IP multimedia subsystem (IMS) architecture and Starent Networks a share in the evolved packet core, Alcatel-Lucent was the only vendor to score deals for all three components of the network.

“This was certainly a vote of confidence from Verizon,” said Mike Iandolo, president of Alcatel-Lucent’s wireless products division. “I should mention, though, we have a big challenge ahead of us, but I can’t imagine a better operator than Verizon to tackle it with. We’ve gone through many technology transitions with Verizon before. I’m confident we can meet their timelines.”

The deal not only establishes Alcatel-Lucent as the leader in the LTE radio access business, Iandolo said, it also demonstrates the vendor can provide a complete solution from service environment to packet core, which will make the vendor even more appealing to operators in the future. Though Verizon is one of the first to announce its vendors, it certainly won’t be the last. Dozens of operators have committed to deploying LTE networks including AT&T, Vodafone and China Mobile. “The market is wide open,” Iandolo said. “This venture is just getting started. We’re in discussions with other operators right now.”

Iandolo’s statements may be bold, but analysts said the Verizon deal gives Alcatel the ammunition to back them up. “With this win and a vote of confidence from a leading carrier, Alcatel-Lucent looks better poised to land deals with carriers around the globe including Vodafone, China Mobile and AT&T,” Morgan Keegan communications equipment analyst Simon Leopold said in a research note.

And Ovum Analysts Steven Hartley and Julien Grivolas added, “Alcatel-Lucent must be breathing a huge sigh of relief this morning. It has emerged as the main winner at Verizon Wireless, winning both radio and IMS elements. This puts the company, which has had a torrid time since the merger of Alcatel and Lucent, on a strong footing for future deals.”

Ericsson’s success can’t be discounted either. The vendor is in virgin territory, never having worked with Verizon before because of its lack of a CDMA product line, but Ericsson also appears to have aggressively courted Verizon. Verizon and part-owner Vodafone conducted LTE trials jointly, evenly splitting six trials on either side of the Atlantic. Ericsson deployed its network under Verizon’s watchful eye in Minneapolis, not in Vodafone’s more familiar territory in Europe. The deal becomes a huge win for Ericsson, showing it can not only win business away from entrenched vendors like Nortel Networks but also compete for LTE contracts with CDMA operators, 10 of which have already announced their plans to migrate to LTE. With the win, Ericsson becomes a firmly entrenched vendor in the US in its own right. It is now building or upgrading the 3G or 4G networks for three of the Tier I domestic operators.

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© 2012 Penton Media Inc.

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