Optical/IP Networks

Lucent Falls Wide

Lucent Technologies Inc.'s (NYSE: LU) dearth of 3G W-CDMA (Wideband Code Division Multiple Access) contracts has seriously damaged its network infrastructure market share status, according to the number crunchers at Gartner Inc.

Last year the U.S. vendor ranked fourth in Gartner’s annual breakdown of worldwide mobile network infrastructure revenues for 2002, notching up an 11 percent market share behind runaway leader LM Ericsson (Nasdaq: ERICY) at 29.5 percent; Nokia Corp. (NYSE: NOK) at 12.9 percent; and Siemens AG (NYSE: SI; Frankfurt: SIE) at 11.7 percent (see Gartner Belabors the Obvious).

The analyst firm’s latest figures show a dramatic 3 percent fall in market share to 8 percent, with North American rivals Nortel Networks Ltd. (NYSE/Toronto: NT) and Motorola Inc. (NYSE: MOT) both chipping away at Lucent's stake (see Network Market Falls 12%).

Gartner’s Jason Chapman argues that the decline is in part due to Lucent’s lack of success in the W-CDMA market. The W-CDMA air interface is part of the Universal Mobile Telecommunications Standard (UMTS). Used with existing GSM (Global System for Mobile Communications) core networks, W-CDMA-compliant handsets and base stations can increase wireless data transfer rates to a potential maximum of 2 Mbit/s [ed. note: flying pigs and blue moons permitting].

To date, the company has only announced two piddly W-CDMA contracts -- a huge contrast to its CDMA (Code Division Multiple Access) market dominance and past success in the GSM space (see Lucent's 3G Bit Part and Lucent Does 3G in Seville ).

“In Europe they are still struggling in W-CDMA and are yet to win major contracts,” comments Chapman. “They will be relying again on CDMA to drag them back up.”

Meanwhile Nokia and Siemens both increased their market standing on the back of a bevy of W-CDMA deals (14 and 13 percent respectively). Ericsson remains the market leader (26 percent).

Despite its poor performance to date, Lucent has publicly insisted it will become a force in the European W-CDMA network market as carriers award further deals (see Lucent Fights for Euro 3G).

— Justin Springham, Senior Editor, Europe, Unstrung

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