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Optical/IP

Moto Preps for Euro 3G

Motorola Inc. (NYSE: MOT) is on the verge of at last announcing its first European UMTS (Universal Mobile Telecommunications Standard) network win, with the likely customer being Portugese carrier Optimus Telecomunicacoes.

The U.S. equipment vendor last year failed to deliver on promises it would emerge from 2003 with infrastructure deals from major Western European carriers (see Motorola Blows Hard on Euro 3G ).

According to various anonymous sources this week, it may be time to pass the port as Moto's dry spell could be over. In light of a private UMTS trial with Optimus last summer that involved around twenty base-station sites, a deployment in sunny Portugual is considered the most likely deal.

Motorola itself declined to comment on the specifics of the win, but a spokesperson did suggest that a UMTS announcement is forthcoming. Optimus could not be reached by press time.

Analysts believe such a deal would be in keeping with the vendor’s UMTS market standing. “The company has been working hard to rejuvenate its base-station product kit, and the results may start to show with new orders,” contends Current Analysis's Ken Rehbehn.

“It is possible they [Motorola] have had a commitment to W-CDMA,” observes Dr Richard Windsor of Nomura Holdings Inc. Following the Portugese trial, Windsor believes that Tier 2 player Optimus would be “a key prime candidate,” noting that “it is extremely unlikely to be a large major contract that could really impact revenue in any serious way.”

Peter Jarich of Current Analysis notes the vendor’s lack of success in this space. “It seems lately that the only vote of approval they got was by being in the Chinese UMTS testing. It’s also significant that Moto didn’t actually publicize the fact they were in the trials. Lucent went to the trouble. So did UTStarcom. It seems that if you had limited UMTS success, you would want to let people know you were still in the game.” (See China Netcom Picks UTStarcom and Lucent Trials 3G.)

Other industry watchers argue this muted approach may be down to a concerted effort by the U.S. vendor to move away from the UMTS infrastructure sector, a market dominated by Nordic heavyweights Nokia Corp. (NYSE: NOK) and LM Ericsson (Nasdaq: ERICY).

“Their strategy seems to be to approach some of the emerging markets with GSM and CDMA,” comments Gartner Inc.'s principal analyst Jason Chapman. “As an overall business, UMTS is still important to it, but maybe it isn’t quite as critical as it was when they still wanted to be a top tier W-CDMA vendor. Their market positioning has shifted somewhat.”

IDC’s Paolo Pescatore concurs. “They haven’t been able to move forward in UMTS as they had hoped for but are doing well in other areas, such as the Middle East. As a company they also have a good understanding of push-to-talk, and that is potentially an area that will open up to them in the future.” (See Motorola Supplies Iraqi GSM and Motorola Tries PTT in Jordan.)

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.

— Justin Springham, Senior Editor, Europe, Unstrung

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