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Optical/IP

Lucent's SBC Win: Confusing News

Lucent Technologies Inc. (NYSE: LU) says SBC Communications Inc. (NYSE: SBC) has adopted its new high-capacity switch for circuit-based voice networks (see Lucent Sells Voice Switch to SBC).

The news raises more questions than Lucent or SBC can answer.

Disappointingly little information is available on the size, scope, or exclusivity of the SBC deal -- if, indeed, there is a deal. All Lucent will say is that it's "getting revenue" from SBC's use of the 5E-XC. An SBC spokesman says, "We will be installing the switch as the demand exists within our 13-state region," but no details are being released. SBC has been a longstanding Lucent customer.

It also turns out the 5E-XC isn't really a new switch, even though Lucent announced it as a new product in its own right. All the elements comprising the platform have been available to carriers for months now, as upgrades to Lucent's existing high-end circuit switch, the 5ESS.

So what's really new here? The announcement's chief significance is to focus on how Lucent has improved its existing circuit-switching gear -- and what that improvement says about the vendor's strategy.

By any yardstick, the 5E-XC is impressive, at least on paper. It can support more than a third more trunks than today's 5ESS -- up to 258,000, Lucent claims. Further, where today's 5ESS switch takes up 12 cabinets for 92,000 trunks, the 5E-XC consumes just one to support the same level of traffic.

In one of Lucent's press statements today, SBC's VP of network planning, Andre Fuetsch, says the new gear will improve SBC's efficiency and reduce its operating and maintenance costs.

But carriers might have to wait another year for some of the more compelling circuit-to-packet capabilities of the 5E-XC. In order to support the Session Initiation Protocol (SIP), which links circuit- to packet-based traffic in telecom and multimedia networks, customers will need to have a special "IP card with SIP software," which isn't due for release until the fourth quarter of 2003.

Without that card, customers won't be able to perform so-called packet trunking, replacing complicated meshes of TDM links with high-speed packetized trunks extending from the voice switch in star configurations.

The 5E-XC beats out at least one key North American competitor, Nortel Networks Corp. (NYSE/Toronto: NT), in terms of sheer size. But Nortel has SIP capabilities built into its DMS-200 and DMS-500 switches.

At least one other tandem-switch vendor, Siemens AG (NYSE: SI; Frankfurt: SIE), offers size and functionality that rival Lucent's, according to Chris Nicoll, director of infrastructure analysis at Current Analysis. But that vendor doesn't have the traction Lucent enjoys with North American incumbents.

Nicoll thinks it's a mistake to judge Lucent too harshly for not having SIP in its 5E-XC today. "It's much too early to talk about IP -- it does Lucent a disservice to talk about IP," he says. "This makes traditional voice networks better, faster, and smaller."

Other analysts seem puzzled by Lucent's announcement. "I do find it interesting that Lucent would come out with a new Class 5 circuit switch just as the demand for such products is waning -- the number of ILEC phone circuits is in decline," writes Dave Passmore, research director at the Burton Group, in an email today.

"Lucent said, 'Let's see where the softswitch market is going,' " says Sam Greenholtz, senior analyst at Communications Industry Researchers Inc. Since the company seems to have determined it's going nowhere (see Lucent Clarifies Product Strategy), it's decided to add to existing facilities and see where the market goes from here, he says.

— Mary Jander, Senior Editor, Light Reading
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gigeguy 12/4/2012 | 9:12:13 PM
re: Lucent's SBC Win: Confusing News I'm very far from being a Lucent person, but geez, folks, they finally have a bit of success to show in the marketplace and you still dump on them! So, it's not a softswitch or SIP. Obviously, SBC didn't want to buy softswitches or SIP, or they would have gone somewhere else. That's the thing about LR - you always find some tarnish, even if it has to be manufactured.
diffraction 12/4/2012 | 9:12:11 PM
re: Lucent's SBC Win: Confusing News
First of all I'd like to say that I think I
represent and unbiased observer.

This is a message to LIGHTREADING.

I also feel there is ample evidence you are dishing out biased judgements towards Lucent.

I've talked to a lot of people in the industry and a lot of people agree something really fishy
is going on.

If I were Lightreading, I'd be careful about appearances of conflicts of interest and I wouldn't want to get into any legal trouble.

I'd like to see full discloser of the heads of
Lightreading and any telecome stock they might own. Will they rise to the challege ?


Scott Raynovich 12/4/2012 | 9:12:11 PM
re: Lucent's SBC Win: Confusing News we own no stock. We have no conflicts. The way we remain a top news source is to analyze as we see it.
boston beans 12/4/2012 | 9:12:10 PM
re: Lucent's SBC Win: Confusing News Was that analysis before, during or after the trip to Caffrey's?

LR is not hard enough. There are many posts and articles which superficially address news without real NYT investigative type reporting. LR articles often appear to placate charismatic individuals like Pauline's Bill Diamond article today or the Tellabs figurehead piece few weeks ago.

LR is the best, but could be better. You guys should press on and go for the Pultzer.

-Beano
beetlejuice 12/4/2012 | 9:12:10 PM
re: Lucent's SBC Win: Confusing News Supports 512,000 Fast MIM channels !
flanker 12/4/2012 | 9:12:09 PM
re: Lucent's SBC Win: Confusing News If I were Lightreading, I'd be careful about appearances of conflicts of interest and I wouldn't want to get into any legal trouble.

No, of course not. Not with an expert in law, not to mention the English language, like you on the case.

I'll take a number three with fried rice. And make it snappy.




wayland_smithy 12/4/2012 | 9:12:04 PM
re: Lucent's SBC Win: Confusing News Flanker observed tactfully:
If I were Lightreading, I'd be careful about appearances of conflicts of interest and I wouldn't want to get into any legal trouble.

No, of course not. Not with an expert in law, not to mention the English language, like you on the case.
I'll take a number three with fried rice. And make it snappy.

---> At least he/she got the subjunctive formation correct - first time I've ever seen that in a LR post. There could be some hope for what little remains of the English language in North America engineering culture ......
wayland_smithy 12/4/2012 | 9:12:04 PM
re: Lucent's SBC Win: Confusing News Flanker observed tactfully:
If I were Lightreading, I'd be careful about appearances of conflicts of interest and I wouldn't want to get into any legal trouble.

No, of course not. Not with an expert in law, not to mention the English language, like you on the case.

I'll take a number three with fried rice. And make it snappy.
hyperunner 12/4/2012 | 9:12:03 PM
re: Lucent's SBC Win: Confusing News Disclaimer: I don't work for a manufacturer.

I don't see bias in this article. This is a classic "non-event" press release from Lucent. It's incremental revenue into an existing account, and using a technology/architecture that seems to be on the wane. If you look back to the original ESS win announcement, this revenue would have been included in whatever terms were disclosed, if any.

If Lucent appear to be under fire from the media recently, it's down to their ongoing problems. The press folks I've spoken to here in Europe are actively looking for good news stories to report, believe me. There are some small sparks of hope out there - projects that would keep a startup happy, but not a money pit like Lucent. After all, they have to fund those executive "performance" bonuses, don't they.

This is a very screwed up company; from a product perspective, a (lack of) strategy perspective, and perhaps most visibly a management/politics perspective. I know from our contacts with the company that internal morale is very low. Geez even the techies that our account managers drag in to see us have a hard time making eye contact! They show you roadmap slides and we have to remind them that some of these products have now been canned. They draw up architecture diagrams, and you have to point out that they don't have a B-RAS anymore, so just how do they propose to build an IP Services network?

Before I start sounding too much like Bobby Max, I'd like to say that I think it's childish and spiteful to talk about wanting companies to "die". The whole industry needs companies to succeed and get some confidence back into our lives. Empty announcements like this are not helping, they're just highlighting how desperate the PR departments are for something to announce.

hR.

Belzebutt 12/4/2012 | 9:12:00 PM
re: Lucent's SBC Win: Confusing News I don't remember the last time a circuit-switch upgrade made news on LR. Must have been a year ago.

This is a sign of the times...
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