BARCELONA -- GSMA Mobile World Congress -- Alcatel-Lucent (NYSE: ALU) is serious about mobile broadband technology Long-Term Evolution (LTE). And with Verizon Wireless poised to announce a shortlist of LTE vendors this week at the Mobile World Congress, Alcatel-Lucent is among the contenders. (See Verizon to Name LTE Vendors at MWC and MWC Preview: LTE Steals the Show .)

Unstrung caught up with Mary Chan, AlcaLu's newly appointed president of end-to-end 4G/LTE networks, before the start of the Mobile World Congress and asked her about Alcatel-Lucent's plans for LTE product development and strategy. (See Hail Mary: Chan Takes 4G Helm at AlcaLu.)

We found out that AlcaLu is no longer jointly developing radio access network (RAN) products with NEC Corp. (Tokyo: 6701) and that it also intends to build its own evolved packet core (EPC) products. And this week in Barcelona, the company will talk up LTE applications and device developments, and perhaps reveal some partners. Read on:

Unstrung: You've been appointed president of end-to-end 4G/LTE networks. What is your remit?

Mary Chan: In addition to the RAN, we are looking at solutions across the core on the packet side, the transport side, the IMS capability, in terms of the evolved voice capability for VoIP, and also the ecosystem in terms of third-party partnership and devices. The intent here is to create an organization that has the total accountability to deliver the end-to-end solution. And we also work with our services team... so my team also has the responsbility of bringing the service aspects out there as well.

So, that is the end-to-end organization. In terms of the product deliveries, we're working across the company through the multiple product divisions we have in order to pull that together.

UN: What is the status of Alcatel-Lucent's relationship with NEC?

MC: We started with looking at joint development of RAN aspects and pulling that together into a joint venture kind of structure. We decided to stop that particular joint development and build our own.

There are some additional discussions in terms of what we can offer to NEC on the packet core and our strong transport assets for supporting the LTE deployment of the Japanese market, and those conversations certainly continue to leverage both companies' strengths on IP and some of the mobile transport areas.

UN: OK, so the relationship has changed to more of a market entry kind of relationship for Alcatel-Lucent getting into Japan, particularly in the areas of transport and packet core, is that correct?

MC: Yes. This is more looking at what we can bring to the table and what we can partner in terms of NEC to go to their market and their customers, which is, in this case, NTT DoCoMo Inc. (NYSE: DCM).

To Page 2

UN: Will Alcatel-Lucent develop 4G core products in-house on its own, or is Alcatel-Lucent seeking a partner for that area of the network, such as Starent Networks Corp. (Nasdaq: STAR)?

MC: We do believe that we have, not only the product platform assets, but also the expertise to build our own packet core. So that's one area that we will be sharing with you as we are getting close to some of that information in terms of our products.

In terms of IOT [interoperability testing], we are asked in many cases to do IOT capabilities. Starent you mentioned [supplies] Verizon on PDSN. So, we have combinations of IOT requirements from our customers and supporting our own end-to-end packet core capabilities.

UN: Can you say how the trial at Verizon is going?

MC: We're going through the third phase, and phase three of testing is progressing well. Most of the focus is on early end-to-end mobile devices and data cards and network performances. We'll be testing 700 MHz as well, as we progress and as we look at the spectrum availability in North America, probably in the June timeframe.

UN: Is Alcatel-Lucent no longer open to partnerships for LTE?

MC: In terms of the partnership and future opportunity as LTE evolves, we certainly will leave that open. Opportunities in terms of applications and devices and ecosystem development, we're pushing strong in that area... We'll be looking at a lot more open system development. So in those areas of partnership, we'll be very active. UN: What do you mean by open system development?

MC: Actually looking at applications… the devices, not necessarily just handsets. These are modules that would go into consumer products that deliver a high-speed broadband experience. In those areas we are actually working with multiple partners in the industry to really start the ecosystem on LTE development.

And then in terms of the core network, the flexibility of all-IP core network technology and an ability to put a larger amount of applications onto that particular type of network certainly enables the service provider to be better at transforming their business model and transforming their service model to satisfy some of the users' expectations. Those are some of the key drivers that I see as early movers.

UN: Compared to your competitors -- Ericsson AB (Nasdaq: ERIC), Huawei Technologies Co. Ltd. , and Nokia Networks , for example -- how far behind is Alcatel-Lucent in LTE product development?

MC: In comparison to our competition, I would say that it depends on the customer base and where you're evolving from. CDMA customers in many of our discussions are taking a leadership in terms of doing early trials and looking at early commercial launch. So we're in good position in terms of capturing those opportunities. So, we have our products across the CDMA evolution to LTE and WCDMA evolution to LTE.

And I do think that the decisions of the operators across many of these networks are a function of their embedded base players. And how those embedded base players can evolve to LTE with the lowest-cost investment possible and the lowest risk in terms of technology evolution in order to get to LTE fastest in the market. So I think we are in good position because of our presence across wireless access technologies and supporting those customers in delivering LTE first to market.

— Michelle Donegan, European Editor, Unstrung