Light Reading
Will be the main supplier and integrator for the carrier's access network upgrade UPDATED 7:00 PM

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
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
Is your network built on 'The Old IP,' or are you part of 'The New IP' revolution?
LRTV Documentaries
A Cultural Shift for an OTT World

9|26|14   |   01:41   |   (3) comments


Telcos need to embrace a new approach to partnerships if they are to generate extra revenues quickly and give customers what they want.
LRTV Documentaries
New Skills Needed as Telecom, IT Collide

9|26|14   |   4:07   |   (1) comment


As telecom and IT collide, new technologies are emerging, new skills are needed and new opportunities for women are arising.
UBB Forum News
Do IP Networks Need An Overhaul?

9|25|14   |   02:01   |   (0) comments


As traffic levels ramp, do IP networks need new technologies and topologies?
LRTV Documentaries
Sprint Wields Its Influence in the Valley

9|25|14   |   3:09   |   (11) comments


Anne-Louise Kardas, Sprint's connection to startups in the Valley, explains how telcos can be innovative and find new opportunities with partners.
LRTV Documentaries
SDN, NFV & The Future of XO's Network

9|25|14   |   3:47   |   (1) comment


XO Communications COO Don MacNeil explains how cloud, SDN and NFV are altering its network requirements as well as changing data centers of the future.
UBB Forum News
The OTT Conundrum

9|24|14   |   01:39   |   (0) comments


What is holding back prosperous partnerships between telcos and the OTT players?
LRTV Documentaries
Putting Broadband to Work

9|24|14   |   01:26   |   (0) comments


High-speed broadband network rollout is key to telco strategies, but it's what happens after the network is built that counts.
Light Reedy
Light Reading's Women in Telecom Recap

9|24|14   |   0:55   |   (4) comments


Our first Women in Telecom breakfast was a huge success, and we hope you'll join us in London for the next event on November 6.
UBB Forum News
Monetizing Ultra-Broadband

9|24|14   |   01:43   |   (2) comments


Ultra-broadband networks need to be built, with fiber-to-the-premises the ultimate goal, but they need to be monetized, too.
LRTV Huawei Video Resource Center
Sales Director of INIT on Plug & Play Switch Devices

9|19|14   |   3:21   |   (0) comments


INIT Italy uses both the Huawei S5700 and S7700 series switches for the campus LAN environment. Sales Director Andrea Curti says their company chose these Huawei devices over others because of their performance, flexible scalability and plug-and-play features.
LRTV Huawei Video Resource Center
Saudi Arabia Upgrades Vocational Training System

9|19|14   |   3:31   |   (0) comments


The Technical and Vocational Training Corporation (TVTC) has 100,000 students, 150 government-owned institutions and oversees 1000 private institutes. The CIO of TVTC explains that Huawei devices have allowed them to manage multiple datacenters using just one software program, scientifically tracking the progress of students and teachers, saving them millions.
LRTV Huawei Video Resource Center
Huawei's Media Solutions Are Here to Stay

9|19|14   |   4:35   |   (0) comments


The current media revolution requires rapid upgrades in technology. New formats (HD, 3D, 4K etc.) and the subsequent explosion of file sizes demand sophisticated network and storage architecture. Social media and the multiple distribution channels require a robust asset management system. Gartner analyst Venecia Liu speaks about the current technological trends in ...
Upcoming Live Events
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
Half of the world's population will be connected to the Internet by 2017, but not just by smartphones and desktops.
Hot Topics
Facebook Pokes Around LTE Direct
Sarah Reedy, Senior Editor, 9/25/2014
Is Redbox Instant Shutting Down?
Mari Silbey, Independent Technology Editor, 9/30/2014
Sprint Wields Its Influence in the Valley
Sarah Reedy, Senior Editor, 9/25/2014
US Ignite Cultivates Gigabit Apps
Jason Meyers, Senior Editor, Utility Communications/IoT, 9/25/2014
Like Us on Facebook
Twitter Feed