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Lucent Fights for Euro 3G

Light Reading
LR Mobile News Analysis
Light Reading
2/25/2004

CANNES, France -- 3GSM Congress -- Lucent Technologies Inc. (NYSE: LU) is still banging its European UMTS drum, despite a dearth of contract wins and high-profile rival success.

Talking to Unstrung today, the U.S. vendor remains insistent it will become a force in Europe’s UMTS (Universal Mobile Telecommunications System) network market, nearly twelve months after making the same, as yet unproven, claim (see Lucent Sticking With UMTS).

UMTS is the 3G upgrade to the GSM standard, using a wideband-CDMA (W-CDMA) air interface on top of the GSM core network to increase voice capacity and boost data-transfer speeds to a possible 2 Mbit/s [ed. note: extreme emphasis on possible].

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

“Clearly Lucent has been quiet in UMTS in Europe but I still think there is a long way to go with deployments,” comments Roger Derrien, VP, UMTS, IN & GSM, Product & Portfolio Management [ed. note: and a contender for the industry’s most acronym-laden business title (MALBT)].

Derrien claims that the industry has “many more years of deploying nationwide networks,” giving Lucent an opportunity to grab market share from the likes of Nokia Corp. (NYSE: NOK), LM Ericsson (Nasdaq: ERICY), and Nortel Networks Corp. (NYSE/Toronto: NT). “We see this as a long haul… It is a big learning curve.”

The Lucent man argues that “in two- to three-years time” Europe’s carriers will still be looking to sign large-scale UMTS contract deals. “They are not locked into all their suppliers. There will be further rounds of awards, and we are actively working with all those operators to get into those rounds... Our goal is to be there. Global carriers are not launching their whole networks at the same time, and we are still in discussions with them.”

The company’s optimistic tone conflicts with rival vendor belief that past success does not guarantee a bright future in the infrastructure game. “The winner of 3G will not be the winner of 2G,” cautioned Nortel’s president of wireless networks, Pascal Debon, at a press briefing yesterday.

Analysts agree with such statements “Lucent has missed the boat,” says IDC’s Paolo Pescatore. “It will be difficult for them to crack UMTS now that other players have proven their case. Lucent are giving the same old talk as Motorola last year." (See Motorola Blows Hard on Euro 3G .)

— Justin Springham, Senior Editor, Europe, Unstrung

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