Light Reading

Mais Alors! Alcatel Bags $1.7B SBC Deal

Light Reading
News Analysis
Light Reading
10/20/2004
50%
50%

SBC Communications Inc. (NYSE: SBC) today announced that it has awarded Alcatel SA (NYSE: ALA; Paris: CGEP:PA) a five-year, approximately $1.7 billion primary supplier agreement for its Project Lightspeed rollout. The award makes Alcatel the main integrator and supplier in SBC's plan to overhaul its access network and drive fiber -- and advanced IP-based services -- closer to subscribers (see Alcatel Wins $1.7B SBC Deal).

When Project Pronto, SBC's last big access network makeover, wasn't pronto enough, SBC kicked off Project Lightspeed, an initiative that, the carrier says, will provide 18 million households with IP-based services including super high-speed data, video, and voice services at a price tag estimated at $4 billion to $6 billion (see SBC Speeds Up FTTH Plan).

This contract award is a huge win for Alcatel, given the sweeping nature of technologies involved and the dollar amount that's cited. "Alcatel is one of the premier equipment suppliers on the planet, and one of the few that could put it all together for a company the size of SBC," says Kermit Ross, principal of Millennium Marketing.

Alcatel will be providing SBC with its own IP routing, Ethernet aggregation and switching, DSLAMs, and fiber-to-the-premises gear, as part of the deal. The SBC win, as much as anything, provides the ultimate validation of Alcatel's acquisition of IP router vendor TiMetra. Mike Quigley, president of Alcatel, North America, says TiMetra put Alcatel in a position to be a "serious IP vendor." (See Alcatel Redraws Router Strategy.)

But Alcatel will also have to hammer some pieces into the big IP access network puzzle. It needs to integrate the optical equipment, residential gateways, middleware, and set-top boxes SBC chooses -- which could come from other equipment vendors. "There's going to need to be, for an end-to-end solution, other awards," says Quigley.

And, though Alcatel is said to be the exclusive provider of several of the Project Lightspeed components, there's always skepticism involving that word, "exclusive."

"When we've looked back at RBOC deals that have exclusivity in the announcement, what's in the contract is something you could drive a truck through," said Morgan Keegan & Company Inc. analyst Simon Leopold on today's conference call with Alcatel.

Still, Alcatel's getting a big boost here. Its $1.7 billion award would make up 58 percent to 72 percent of SBC's total projected spend. "They are not missing many pieces here," says Scott Clavenna, chief analyst of Heavy Reading. "It’s not like Alcatel was overlooked for routing, DSLAMs, or Ethernet aggregation equipment.

"I walked away from this feeling like Alcatel is in an awesome position," says Clavenna.

"SBC will convert much of its access network from POTS to pipes over the next few years, and, in terms of lines converted, it's a much bigger deal than Verizon's FTTP project," says Millennium's Ross.

Alcatel has long been considered a favorite to win the access piece of the SBC's project. Last month, Light Reading Insider accurately picked Alcatel among the alliances SBC would form to spearhead its deep fiber push (see Carriers Prep DSL Wave Part II ). And, in a key development, it was made clear that SBC's approach was going to be neither all fiber nor all copper.

SBC says it is trialing FTTP (fiber to the premises) in a number of locations and it will launch trials of FTTN (fiber to the node), which will involved a wide variety of next-generation packet and broadband gear, early in 2005. This, too, bodes well for Alcatel, which can provide DSLAMs and fiber access gear.

"We have the range of technologies to give SBC the flexibility to use DSL technology or fiber technology to ensure that the video services will work," Alcatel's Quigley says.

The losers in this deal may include several vendors, analysts say. Lucent Technologies Inc. (NYSE: LU), for one, is thought to have been one of the other integrators evaluated by SBC, but not chosen. "The first time in the batter's box with the new systems integration strategy, and they strike out," says Ross.

Other vendors biting their nails include Advanced Fibre Communications Inc. (AFC) (Nasdaq: AFCI), which could see its FTTP gear locked out of SBC for years to come, analysts say.

Given the fact that IP routing was included in Alcatel's package, the deal also doesn't look to be doing routing giant Cisco Systems Inc. (Nasdaq: CSCO) any favors. Cisco was known to be courting the SBC deal as an integrator, possibly in combination with a remote DSLAM player such as Adtran Inc. (Nasdaq: ADTN), several sources have said.

SBC has been here before, but never with as complete, complex, and comprehensive a solution proposed on a single network.

The carrier's Project Pronto initiative, announced in the late 90s, proposed to provide 77 million Americans with DSL service by the end of 2002. By October 2001, however, SBC announced that it would reduce capital spending by 20 percent in 2002 and scale back its original deployment schedule. This summer, SBC had 4.3 million DSL customers.

— Phil Harvey, News Editor, Light Reading

(30)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 3   >   >>
green hornet
50%
50%
green hornet,
User Rank: Light Beer
12/5/2012 | 1:09:59 AM
re: Mais Alors! Alcatel Bags $1.7B SBC Deal
Alcatel has partnered with Tropic Networks for a ROADM solution, so does this win for Alcatel also mean that Tropic and their ROADM solution are winners as well? Hmmm... if so, this would mean the Movaz/Lucent ROADM didn't make the cut, which Movaz was counting on for a significant piece of its future revenue. Movaz has no hope of business from BellSouth or Qwest, and now possibly SBC, so that would leave Verizon as the only RBOC to sell to (fat chance!). Will this be the straw that forces the investors to pull the plug on their $185M investment??
Stevery
50%
50%
Stevery,
User Rank: Light Beer
12/5/2012 | 1:09:58 AM
re: Mais Alors! Alcatel Bags $1.7B SBC Deal
Looks like Pat will have to think up new ways to raid the LU pension monies.
maddog
50%
50%
maddog,
User Rank: Light Beer
12/5/2012 | 1:09:58 AM
re: Mais Alors! Alcatel Bags $1.7B SBC Deal
Wrong! This will be a reason given for paying herself a larger bonus. She will need more "retention" money to help her work harder in the face of this loss.
private_eye
50%
50%
private_eye,
User Rank: Light Beer
12/5/2012 | 1:09:57 AM
re: Mais Alors! Alcatel Bags $1.7B SBC Deal
This must be at the expense of Juniper ERX.
startup_shutup
50%
50%
startup_shutup,
User Rank: Light Beer
12/5/2012 | 1:09:56 AM
re: Mais Alors! Alcatel Bags $1.7B SBC Deal
This was inevitable!
Frank
50%
50%
Frank,
User Rank: Light Beer
12/5/2012 | 1:09:56 AM
re: Mais Alors! Alcatel Bags $1.7B SBC Deal
Hello Ethernet, Goodbye ATM?

It's quite remarkable to me that both Bell South and now SBC have gone the way of Ethernet in their optical platform pursuits, and _apparently_ in the process of doing this they are ditching ATM in the last mile. Last week BLS announced a deal with LU to do this, and more recently SBC with Alcatel (see below):

-------------

SBC Selects Alcatel as Primary Supplier for Project Lightspeed

SBC Communications selected Alcatel as its primary network infrastructure and services supplier for Project Lightspeed. The deal is estimated to be worth $1.7 billion to Alcatel over the next five years.

Under the agreement, Alcatel will supply access and fiber technologies, IP routing and Ethernet switching solutions, and network systems integration services. Specifically, Alcatel will provide SBC with its remote 7330 IP DSLAM solution, which is capable of supporting wire speed triple play services and multiple variations of DSL for SBC's Fiber to the Neighborhood architecture. In addition, Alcatel provides its 7340 Fiber to the Premise (FTTP) solutions. SBC has selected Alcatel's 7750 Service Router and 7450 Ethernet Services Switch which will enable SBC to offer differentiated IP-based services, such as video.

Additionally, Alcatel will work with SBC to ensure seamless video systems integration.
http://www.alcatel.com
20-Oct-04

Earlier this month, the FCC voted to relieve incumbent local telephone companies of most obligations to lease advanced fiber-to-the-home (FTTH) network facilities to competitors at a regulated, cost-based price. Specifically, incumbents are relieved from unbundling requirements for fiber-to-the-curb (FTTC) loops, where fiber is extended within 500 feet of a customers premises. The new rules free companies to choose between FTTH or FTTC networks based on marketplace characteristics, rather than disparate regulatory treatment.


Following the FCC ruling, SBC announced "Project Lightspeed" - its plan to build a new fiber-optics network into neighborhoods. SBC now aims to provide 18 million households with "super high-speed data, video and voice services" by year-end 2007 -- rather than five years as previously announced. Under Project Lightspeed, SBC will provide integrated IP-based television, ultra-high-speed broadband, IP voice and wireless bundles of products and services. Through Project Lightspeed, the company will deploy 38,800 miles of fiber - double the amount used to build out the company's DSL network - at a cost of $4 billion to $6 billion.
---------------
If I'm reading this wrong, someone please advise.

Frank Coluccio
ChatEnChapeau
50%
50%
ChatEnChapeau,
User Rank: Light Beer
12/5/2012 | 1:09:55 AM
re: Mais Alors! Alcatel Bags $1.7B SBC Deal
>> This must be at the expense of Juniper ERX.

Actually, I believe Juniper, their new found friends (LU) and RSTN bid for the contract. That was a non-starter. The ERX is NOT an ethernet friendly box. For that matter, nothing JNPR does is ethernet ready.

Having said that, with Redback imploding, I suspect the ERX has a little more life.

C-en-C
triple_double
50%
50%
triple_double,
User Rank: Light Beer
12/5/2012 | 1:09:55 AM
re: Mais Alors! Alcatel Bags $1.7B SBC Deal
IP DSLAM = ATM (user side) + BRAS functions (above L2) + Ethernet uplink
First mile is still IP/ATM/ADSL because of the ADSL standard.
ATM & AAL5 still have to be provided at the user side (unless 802.3ah copper used).
The drawback of the 802.3ah copper is bandwidth (10Mbps @ 750 meter for VDSL, 2 Mbps @ 2700 meter for SHDSL. So triple-play might be possible by FFTx. In 802.3ah copper, first mile is IP/VDSL or IP/SHDSL.
There is no doubt that Redback and Juniper will be under pressure, since Alcatel and some other DSLAM vendors has been integrating BRAS functions into their DSLAMs.
OpticOm
50%
50%
OpticOm,
User Rank: Light Beer
12/5/2012 | 1:09:55 AM
re: Mais Alors! Alcatel Bags $1.7B SBC Deal
I think this confirms what I had been saying for some time, that Alcatel will become the major supplier of telecommunication equipment in the world.
NT and LU self destructed, only Cisco stands, but in a different market.
Maybe we will see Cisco move more into telco...
lightreceding
50%
50%
lightreceding,
User Rank: Light Beer
12/5/2012 | 1:09:54 AM
re: Mais Alors! Alcatel Bags $1.7B SBC Deal
This is a long time play by Alcatel to put IP in their DSLAM and push out the DSL Aggregator. It appears they are making progress.

SBC is/was a big Redback customer. Juniper is/was in trials with SBC with the ERX. This could be a big set back for both and is probably the reason why Redback is imploding.

However Alcatel won't have an easy time pulling this off. They have not done well integrating acquired companies or working with technology partners in this area. In any case though Alcatel does seem to be outdoing LU and NT.
Page 1 / 3   >   >>
Flash Poll
From The Founder
Last week I dropped in on "Hotlanta," Georgia to moderate Light Reading's inaugural DroneComm conference – a unique colloquium investigating the potential for drone communications to disrupt the world's telecom ecosystem. As you will see, it was a day of exploration and epiphany...
LRTV Documentaries
Verizon's Emmons: SDN Key to Cost-Effective Scaling

5|22|15   |   03:53   |   (0) comments


For Verizon and other network operators to ramp up available bandwidth cost effectively, they need to move to SDN and agree on how to do that.
LRTV Documentaries
Lack of Universal SDN a Challenge

5|21|15   |   04:51   |   (3) comments


Heavy Reading Analyst Sterling Perrin talks about how uncertainty about SDN standards and approaches may be slowing deployment.
LRTV Custom TV
Steve Vogelsang Interview: Carrier SDN

5|20|15   |   05:02   |   (0) comments


Sterling Perrin speaks to Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, about the new Carrier SDN-enabling Network Services Platform and the operator challenges it solves.
LRTV Custom TV
Carrier SDN: On-Demand Networks for an On-Demand World

5|20|15   |   20:52   |   (0) comments


Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, talks about requirements and benefits of Carrier SDN during the keynote address at the Light Reading Carrier SDN event May 2015.
LRTV Documentaries
The Security Challenge of SDN

5|19|15   |   02:52   |   (0) comments


CenturyLink VP James Feger discusses concerns that virtualization could create new vulnerabilities unless network operators build in safeguards.
LRTV Custom TV
NFV Elasticity – Highly Available VNF Scale-Out Architectures for the Mobile Edge

5|18|15   |   5:50   |   (0) comments


Peter Marek and Paul Stevens from Advantech Networks and Communications Group talk about their NFV Elasticity initiative and the company's latest platforms for deploying virtual network functions at the edge of the network. Packetarium XL and the new Versatile Server Module: 'designed to reach parts of the network that other servers cannot reach.'
LRTV Huawei Video Resource Center
Bay Area Spark Meetup 2015

5|14|15   |   3:54   |   (0) comments


Developed in 2009, Apache Spark is a powerful open source processing engine built around speed, ease of use and sophisticated analytics. This spring, Huawei hosted a meetup for Spark developers and data scientists in Santa Clara, California. Light Reading spoke with organizers and attendees about Huawei's code contributions and long-term commitment to Spark.
LRTV Custom TV
The Transport SDN Buzz

5|12|15   |   06:01   |   (1) comment


Sterling Perrin, senior analyst at Heavy Reading, speaks with Peter Ashwood-Smith of Huawei and Guru Parulkar of ON.Lab about the evolution of transport SDN and the integration of technologies.
LRTV Custom TV
Next-Generation CCAP: Cisco cBR-8 Evolved CCAP

5|5|15   |   04:49   |   (0) comments


John Chapman, Cisco's CTO of Cable Access Business Unit and Cisco Fellow, explained the innovation design of Cisco's cBR-8, the industry's first Evolved CCAP, including DOCSIS 3.1 design from ground-up, distributed CCAP with Remote PHY and path to virtualization. Cisco's cBR-8 Evolved CCAP is the platform that will last through the transitions.
LRTV Custom TV
Meeting the Demands of Bandwidth & Service Group Growth

5|1|15   |   5:35   |   (0) comments


Jorge Salinger, Comcast's Vice President of Access Architecture, explains how DOCSIS 3.1 and multi-service CCAP can meet the demands of the bandwidth and service group growth.
LRTV Custom TV
DOCSIS 3.1: Transforming Cable From Hardware-Defined Network to Software-Defined Network

4|29|15   |   03:48   |   (0) comments


John Chapman, Cisco's CTO of Cable Access Business Unit and Cisco Fellow, explains how DOCSIS 3.1 can transform cable HFC network to a more agile software-defined network.
LRTV Huawei Video Resource Center
Predicting Traffic Patterns for Quality Mobile Broadband

4|29|15   |   6:45   |   (0) comments


Accessing information ubiquitously creates complexity and creates heavy traffic onto the network, especially at large-scale events like sporting events or festivals. In this video, Huawei's Mohammad Hussain speaks to experts about how to predict traffic and improve user experience during periods of heavy traffic.
Upcoming Live Events
June 8, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
Network functions virtualization (NFV) is not the easiest of topics to take on board, so here's a Light Reading infographic, developed following conversations with the folks at HP, that helps make sense of where NFV is taking the industry.
Hot Topics
10 Alternate Uses for Tablets
Eryn Leavens, Copy Desk Editor, 5/22/2015
Verizon Saves 60% Swapping Copper for Fiber
Sarah Thomas, Editorial Operations Director, 5/19/2015
Choosing a Technology Supplier? Consider Changing Your Selection Criteria
Steve Saunders, CEO and founder, Light Reading, 5/18/2015
Bidding War for TWC Looks Likelier
Alan Breznick, Cable/Video Practice Leader, 5/22/2015
Chattanooga Charts Killer Gigabit Apps
Mari Silbey, Senior Editor, Cable/Video, 5/20/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
With 200 customers in 60 countries, Stockholm-based Net Insight has carved out a solid leadership position in one of the hottest vertical markets going in comms right now: helping service providers and broadcasters deliver video and other multimedia traffic over IP networks. How has Net Insight managed to achieve this success in the face of immense competition from the industry giants?
My ongoing interview tour of the leading minds of the telecom industry recently took me to Richardson, Texas, where I met with Rod Naphan, CTO and SVP, Solutions, ...
I recently popped down to Texas to chat with CEO Eric L. Pratt about his company, Taqua.
Cats with Phones