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Alcatel Names Its 21CN Partners

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News Analysis
Light Reading
5/20/2005
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After a few weeks of hesitation, Alcatel (NYSE: ALA; Paris: CGEP:PA) has named three partners it is taking into the metro nodes of BT Group plc's (NYSE: BT; London: BTA) next-generation network, the 21CN (see BT's 21CN: Metro Partners Under Wraps and Alcatel Picked for BT's 21CN).

The companies are B-RAS vendor Redback Networks Inc. (Nasdaq: RBAK), session border controller supplier Acme Packet, and media server vendor Convedia Corp.

While there are no great surprises in that grouping, the news will still be a significant boost for those companies, as BT's 21CN plans are being closely watched by other major carriers around the world. "There are no surprises. It's a solid list of partners to go with a good package of Alcatel products," says Graham Beniston, analyst at large at Heavy Reading.

Alcatel also added further detail to its direct engagement. In addition to its 7750 Service Router and 5620 Service Aware Manager, the vendor is also supplying its 7510 IP media gateway, says Basil Alwan, president of Alcatel's IP division. That product is already in use at a number of other carriers, including Belgacom (Euronext: BELG), China Telecommunications Corp. (NYSE: CHA), and Slovak Telecom.

Alwan says that Redback, which will supply its SmartEdge Service Gateway, is a long-standing partner, and that Alcatel has also "done work with Acme in the past," though he couldn't say how the relationship with Convedia came about. The combination of Alcatel and Redback technology has been deployed by at least one other major carrier recently (see Alcatel, Redback Score at BellSouth and Redback, Alcatel Close to Alliance).

Alwan says negotiations are still underway with BT about other issues, such as the level of integration and support each company will provide to the carrier, and whether the metro category vendors will provide any associated service creation and delivery platforms. BT also chose Cisco Systems Inc. (Nasdaq: CSCO) and Siemens Communications Group as metro node suppliers.

Alwan says there are no plans to make any investments in either of its privately held partners, something that Fujitsu has done with at least one of its 21CN partners (see Fujitsu Invests in Meriton).

"Of course we need to ensure we can deliver to BT, but these are financially sound companies with good investors. Also, these sorts of business wins tend to attract other outside investments" that can help companies grow and meet their customers' demands, says Alwan.

So what of the partners? Redback is, naturally, chuffed about the deal, though, like every other 21CN supplier, isn't providing any financial details. Chief marketing officer Marco Wanders says that BT, an existing Redback customer, "is doing something unique in the industry. This is good visibility for every company that's selected."

He says the SmartEdge devices will "add subscriber intelligence" to the network, though it's not clear yet about the exact network design and how all the different elements will fit together. "This reflects a growing need for our gateways," adds Wanders, who cites recent contract wins at BellSouth Corp. (NYSE: BLS), Atlas Interactive, and Arcor AG & Co. KG in Germany as significant deals (see Redback, ZTE Win India Contract , Arcor Picks Redback's Routers, and How Redback Won BellSouth).

Acme Packet, meanwhile, is one of the leading session border controller vendors that already claims multiple Tier 1 carrier customers, with the latest being Spain's Telefónica SA (see Telefónica Deploys Acme Packet SBCs and Acme Packet Claims Top Spot).

The company had not responded to calls as this article was published.

Alcatel has tried in the past at providing its own session border functionality, having acquired one of the sector's early players (see What Alcatel Did With Avarox). But it seems the company is destined to need a partner in this space until it develops a new in-house product or makes another M&A move, something that Juniper Networks Inc. (Nasdaq: JNPR) has felt obliged to do recently (see Juniper to Acquire Kagoor).

As for Convedia, it also has found success with other major carriers, though this deal will firmly thrust it into the limelight (see Convedia Thrives on Asian Base, Convedia Bets on IP-Only Servers, and Convedia Claims Top Ranking). It names China Telecom, China Unicom Ltd. (NYSE: CHU), Telefónica, and Singapore Telecommunications Ltd. (SingTel) (OTC: SGTJY) among its carrier customers, and is believed to have been deployed at AT&T Corp. (NYSE: T).

Convedia is also rumored to have been included by at least one other successful metro category supplier as part of its bids. The company hadn't returned calls for comment as this article was published.

— Ray Le Maistre, International News Editor, Light Reading

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