Ericsson Fights for Orange 3G

LM Ericsson (Nasdaq: ERICY) has hit back at reports it has been dumped by Orange SA's (London/Paris: OGE) 3G network rollout project, insisting it remains part of the carrier’s plans and will deliver on a previous agreement.

In February Ericsson announced it had won a contract to supply Universal Mobile Telecommunications Service (UMTS) equipment for the carrier’s core network infrastructure throughout France (see Orange Picks Ericsson's Core).

UMTS core network equipment includes packet-based elements such as Serving GPRS Support Nodes (SGSNs), GPRS Gateway Support Nodes (GGSNs) and IP routers, as well as circuit-switched equipment such as Mobile Switching Centres. It may also include backbone transport equipment (see A Wireless Taxonomy for more detail).

Orange is known to have been reevaluating all of its existing 3G contracts in recent months, however, and developments with rival vendors yesterday cast doubts over the validity of Ericsson’s original deal (see Orange Chews 3G Kit).

Announcements with Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Nokia Corp. (NYSE: NOK), and Nortel Networks Corp. (NYSE/Toronto: NT) appear, on the surface at least, to have left Ericsson out in the cold. Media reports today echo this sentiment, suggesting the move is a bitter blow for the Swedish vendor’s 3G aspirations.

Ericsson is at pains to confirm that this is not the case, and that the French deal will go ahead. “We are absolutely still involved,” spokesman James Borup tells Unstrung. “Our press release from February still stands, and we see no reason to follow up on that. The way the announcements were made yesterday seems to have caused quite a lot of confusion and speculation in the market.”

Borup points out that Alcatel, Nokia, and Nortel’s contracts involve the 3G radio access network only, and make no reference to which vendor is likely to supply the carrier’s core network kit. “Their announcements have no effect on our involvement in the core network side. That stands and has not changed.”

Orange spokeswoman Sarah Taylor also confirmed that Ericsson is to remain a key supplier to the carrier.

Ericsson’s involvement in the high-profile French 3G network rollout will be in keeping with its market leading position. According to a recent Unstrung Insider report -- "W-CDMA: Disrupting the Technology Chain" -- Ericsson controls approximately 40 percent of the market, leaving closest rival Nokia trailing with 32 percent.

“I am confident that Ericsson’s 3G solution is clearly superior to both Nortel and Nokia’s,” opines Dr Richard Windsor of Nomura Holdings Inc [Ed. note: And mums, it gets your whites whiter -- even in a cool wash!].

— Justin Springham, Senior Editor, Europe, Unstrung

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