Italtel: We Need US Partner

European softswitch firm has its eyes on the US market but says it needs a partner to break in

May 25, 2005

3 Min Read
Italtel: We Need US Partner

STOCKHOLM – VON Europe – European softswitch vendor Italtel SpA has plans to launch into the U.S. market in search of RBOC business but says it needs a partner to help it make the leap.

The company has an impressive pedigree in Europe, where it has customers such as Telecom Italia SpA (NYSE: TI), Belgacom (Euronext: BELG), Cable & Wireless plc (NYSE: CWP), Groupe Cegetel, and FastWeb SpA. (See Italtel Boasts Softswitch Share, Italtel Claims Euro Leadership, Italtel Reports 2004 Results, FastWeb Picks Italtel , C&W Plans Its Own 21CN, and Belgacom Picks Italtel, Cisco.)

Now it wants to export its experience and technology to the U.S. market, says CTO Tony D'Angelo. "We believe the European market, in terms of triple-play deployment and experience, is further ahead than the U.S., and that means we have something to offer North America in terms of solution availability.

"In the past there was a duopoly there, with Lucent and Nortel, that made that market unreachable, but that's not the case any more. We are very interested in North America."

He adds: "Our strategy for the U.S. is to find a partner that can help us build our brand there. At the moment we are not known in North America."

But doesn't Italtel have a ready-made partner in the U.S. in the form of Cisco Systems Inc. (Nasdaq: CSCO)? The router vendor is a close ally in Europe and an investor, holding an 18.4 percent stake (see Albacom Picks Italtel, Cisco and Cisco, Italtel Get Closer).

D'Angelo won't comment further, confirming only that Cisco and Italtel have a good and close working relationship.

So what is Italtel looking for? A company with closer ties to the RBOCs' next-generation network plans than Cisco? That might lead to Alcatel (NYSE: ALA; Paris: CGEP:PA), which has had much success in the U.S. of late, and which is one of the companies, along with Siemens Communications Group and Nokia Corp. (NYSE: NOK), rumored in the Italian business press to have shown an interest in buying Italtel at various stages in the past nine months. (See Eurobites: Incumbents Splash Their Cash, Scuttlebutt: Italtel's Up for Grabs, Mais Alors! Alcatel Bags $1.7B SBC Deal , and Alcatel, Redback Score at BellSouth.)

Again D'Angelo can't comment, though he says he's not surprised that there's been reported interest in Italtel from some of the larger vendors.

Even with a partner, an entry into the U.S. market wouldn't be without its complications, as Italtel's experience is with European operators and services. The CTO says it would pose a development problem if operators wanted every single feature of their existing voice switches replicated in a softswitch, but he doesn't believe that would be a requirement.

He also doesn't see too many problems with the Osmine process that vendors must go through before their systems can be deployed by the RBOCs (see Telcordia's Osmine Gold Mine). "We have quantified what it would take to get past that process, and it wouldn't take an enormous amount of development. And I believe there will be some relaxation there," notes D'Angelo, who believes the RBOCs will want the process speeded up as their next-gen system requirements become more pressing.

"The RBOCs are beginning to feel the heat of competition from the cable operators, and they'll want everything to move a lot quicker so they can deploy and develop services a lot faster."

— Ray Le Maistre, International News Editor, Light Reading

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