Best known for its almost daily announcements of wireless contracts in China, UTStarcom Inc. (Nasdaq: UTSI) has been quietly building a base camp in Europe as part of its strategy to spread its wings (see UTStarcom's Chinese Takeout).

Now the company is becoming more vocal about its European strategy, which is based on the development of existing fixed broadband access gear and a partnership in the wireless broadband sector.

In 2002, the company had one person, Bernd Schilp, in the region. Now, as VP of Europe, Schilp heads up a team of 65 with revenues, he says, in the "double digit millions of Euros" derived from a broad mix of carriers in Western and Eastern Europe (see UTStarcom Targets Euro Growth).

Much of that penetration came from the acquisition of CommWorks assets from 3Com Corp. (Nasdaq: COMS) in May 2003, says Schilp (see 3Com Completes CommWorks Sale).

In particular, between 10 and 15 operators, including Spain's Telefónica SA, use the TC1000 multiservice access box inherited from 3Com. "Now we're trying to move these guys towards a full IP-based triple play solution," says Schilp. This incorporates the vendor's recently unveiled IPTV delivery system mVision (see UTStarcom, Myrio Have Their IPTV ).

The vendor also has its AN2K digital loop carrier (DLC) embedded in a number of carriers in Eastern Europe and Russia, though Schilp won't reveal the extent of its use. UTStarcom's plan is to develop the DLC into a next-generation IP access node suitable for triple-play (VOIP, video, data) delivery and traditional POTS voice.

There's a problem with this strategy, though. While the CommWorks acquisition and DLC deals have given UTStarcom an installed base of European carrier customers, that hasn't been nearly enough to cause the incumbent vendors, such as Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Ericsson AB (Nasdaq: ERICY), and Siemens Communications Group, any concern.

Schilp admits that "you need a good reference customer to get in the door," and he reckons he got that with an IP DSLAM contract at pan-European ISP Tiscali and a deployment at Dutch operator Versatel Telecom International N.V. earlier this year (see Tiscali Uses UTStarcom DSLAMs and UTStarcom Wins Dutch DSLAM Deal).

"We needed to go and win a Tiscali before we could talk to the likes of BT and Deutsche Telekom. They're never willing to be the first," says Schilp.

As for competing with the major European vendors, he says the only way to get noticed is to offer "a modern unit that has high speeds and greater efficiency, and we have that. Look at what we're doing with our IP DSLAMs in Japan. We're providing up to 30 Mbit/s per customer, and that's what you need to deliver TV services." (See UTStarcom Scores With Yahoo!.)

And what of the wireless broadband strategy? Schilp says that's based on UTStarcom's partnership with startup vendor IPWireless Inc. (see UTStarcom, IPWireless Team). UTStarcom has licensed IPWireless's technology and will develop and manufacture fixed wireless base stations to sell to European carriers.

"We've got about 10 ongoing trials, mostly in Eastern Europe, where the technology is used as an alternative to DSL. There are a number of operators with wireless local loop licenses that had originally planned line-of-sight deployments, and now we're working with them on non line-of-sight strategies."

Schilp says eastern Germany is a particularly good region to market this technology to because of the difficulties and cost of deploying DSLAMs in existing facilities, and that "we're talking to a number of significant carriers, such as Deutsche Telekom and [pan-European service provider] Tele2, that have stakes in a number of East European carriers."

— Ray Le Maistre, International News Editor, Light Reading