On this morning's quarterly conference call, Lucent Technologies Inc. (NYSE: LU) CEO Pat Russo boasted of newfound prospects in the voice-over-IP (VOIP) market (see China, Wireless Save Lucent ).

“Voice over IP is getting a lot of attention. It is a major long term opportunity… The category covers a broad area… The migration has definitely begun,” Russo went on (and on) “There’s a lot in the works, some successes I can’t talk about yet -- stay tuned."

So what's the catch? Lucent has sent mixed messages about VOIP in recent years. And analysts aren't quite sure what to make of the shifting VOIP winds, but they say Lucent has a lot to prove in the market area.

“We are looking forward to them demonstrating proof of Pat’s statements. So far, Lucent has not distinguished itself in this market," says Steve Levy, managing director of wireline equipment equity research at Lehman Brothers.

Another analyst, who requested anonymity, said Russo’s comments were “all hot air." He said the company has failed to execute in this market and is lagging behind its competitors.

Jon Arnold, VOIP equipment analyst for Frost & Sullivan, says Lucent’s “off-again, on-again softswitch strategy” has confused its customers and has forced them to go elsewhere. “Now, Lucent is doing anything and everything it can to keep pace with Nortel,” he says (see Lucent Performs Softswitch U-Turn).

The most recent setback for the company occurred earlier this month when Nortel Networks Corp. (NYSE/Toronto: NT) announced a huge softswitch win with Verizon Communications Inc. (NYSE: VZ), right in Lucent's own back yard (see Nortel Soars on Verizon VOIP Deal). Lucent was quick to point out that it has not been totally excluded from the deal. It has 18 months to come up with a softswitch strategy to replace its own Class 5 switches in Verizon’s network.

Lehman Brothers’ Levy notes, “They better have something within a year -- it would be a pretty bad thing if Lucent’s switches get displaced by one of these next-generation suppliers.”

Russo did her best to allay this concern on the conference call: “We are working with them [Verizon] to make sure they understand our capabilities and the time frames in which we can do it."

Meanwhile, next-gen players like Sonus Networks Inc. (Nasdaq: SONS) (which already has media gateways installed with Verizon), Telica Inc., Taqua Inc., and Tekelec Inc. (Nasdaq: TKLC) are devoted to the softswitch market and are sure to come banging on Verizon's door.

— Jo Maitland, Senior Editor, Boardwatch