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AlcaLu Teams for 3G CDMA Femtocells

Alcatel-Lucent (NYSE: ALU) made its first official move in the 3G CDMA femtocell market today with the announcement that it will work with Airvana Inc. to develop a CDMA EV-DO femtocell solution that is based on IP Multimedia Subsystem (IMS). (See AlcaLu, Airvana Team Up.)

The news won't come as a complete shock to femto followers as the two companies staged a demonstration of this solution at the CTIA show in Las Vegas earlier this year. (See AlcaLu, Airvana Demo Femtocell and In Focus: Femtocells.)

The combined offering, which Airvana claims is the first 3G femto solution for CDMA operators, comprises Airvana's HubBub femtocell access point and Alcatel-Lucent's IMS core network elements. Airvana will add new interfaces to its femtocells so that they can be integrated with AlcaLu's IMS mobile core products.

U.S. CDMA operators, Verizon Wireless and Sprint Corp. (NYSE: S), have already expressed some interest in femtocells. Sprint has even launched the Airave CDMA femto from Samsung Corp. in Denver, Indianapolis, and Nashville, Tenn. But according to a recent Unstrung Insider report, "Femtocells: US Market Prospects," operators are struggling with the femto business case and major femto deployments are not expected until 2009 or even 2010. (See Sprint Goes Femto, Verizon Goes Femto?, and Femtocells Face Uncertain Future in US.)

Verizon Wireless CTO Tony Melone told Unstrung earlier this year that Verizon was "looking at" the technology as a way to boost coverage on its CDMA network before the operator moves on to next-generation so-called 4G technology Long-Term Evolution (LTE). Click the play button below to watch Melone's talk about Verizon's view on femtos in the Light Reading TV interview from the CTIA Wireless show. (See Verizon Eyes Femtos.)

But Airvana says this new product offering is not just for the U.S. market. "Together, we're going out to CDMA operators around the world," says Amit Jain, vice president and general manager of CDMA Femtocell Business Unit at Airvana. (See CDMA Dev Group Dominates.)

One potential market for this new EV-DO femto could be China, where China Telecom Group -- the state-owned parent of China Telecom Corp. Ltd. (NYSE: CHA) -- plans to pump $11.7 billion into the CDMA network it is in the process of acquiring from China Unicom Ltd. (NYSE: CHU) over the next three years. By the end of the three-year investment period, China Telecom Group wants to have CDMA 1xEV-DO coverage in all urban areas, a capacity for 200 million customers, and the whole network IMS-enabled. (See China Telecom's Big Numbers, China Telecom Unveils CDMA Plans, China to Get 3G – At Last!, and China Begins $70B Carrier Revamp.)

Both Airvana and Alcatel-Lucent declined to name operators that they are working with. Airvana's Jain said that the new joint solution is not currently in trials.

"There's a strong preference among certain operators that they'd like to use IMS networks to support calls from femtocells," says Jain. "The reason for choosing IMS is that it's becoming the new way to build a mobile switching core."

Today's news brings Airvana's number of femtocell partnerships to four. It already has a CDMA femtocell reseller agreement with Motorola Inc. (NYSE: MOT) The company has also partnered with Nokia Networks and Thomson S.A. (NYSE: TMS; Euronext Paris: 18453) for UMTS femtocells. (See Airvana, Thomson Team, NSN, Airvana Team, and Thomson Sidelines ip.access.)

— Michelle Donegan, European Editor, Unstrung

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