Alcatel SA (NYSE: ALA; Paris: CGEP:PA) is looking to maintain its wireless router partnership with Cisco Systems Inc. (Nasdaq: CSCO) – despite rumors to the contrary – but the French vendor is talking to Megisto Systems et al. about adding more flexible billing and other data services to its portfolio, says a source familiar with the company (see Having a Flutter on the GGSNs).

There had been rumors last week that Alcatel would actually ditch Cisco in favor of a startup – but when we asked Alcatel, they denied it. Cisco had no comment, and Megisto hasn't actually gotten back to us on this matter yet.

Meanwhile, an Unstrung source says that, if anything, Alcatel is looking to build closer ties with Cisco on the data networking front. However, the company is checking out some offerings from startups because it wants to be able to offer its network customers certain packet-level data services, such as roaming, content filtering, and flexible billing options.

Lucent Technologies Inc. (NYSE: LU) may be following a very similar game plan, according to analysts (see Lucent: All Sizes Fit All). They see the company, which has just axed its own wireless router, using Cisco as a main supplier and then bringing in startup kit if the customer specifically wants it for certain data services.

Wireless routers, also known as GPRS Gateway Support Nodes (GGSNs) in GSM-based networks and Packet Data Serving Nodes (PDSN) in CDMA networks, are the primary interface between a carrier’s radio and packet core networks. In their next-generation guises, these wireless routers comprise a new class of equipment that adds sophisticated service creation, billing, and IP traffic management capabilities to this strategic point in the network.

— Dan Jones, Senior Editor, Unstrung www.unstrung.com