NSN Reveals Plans for Nortel's LTE

Nokia Networks has shed light on what it plans to do with the Nortel Networks Ltd. Long Term Evolution (LTE) assets. (See NSN Picks at Nortel's Mobile Bones and Will Others Bid for Nortel's Wireless Assets? )

NSN's head of radio access, Marc Rouanne, tells Unstrung that the vendor plans to incorporate Nortel's LTE algorithms and software into its own flagship Flexi base station platform. NSN will not maintain or have to integrate two separate LTE base station product platforms.

"There will be only the Flexi base station," says Rouanne. "To strengthen the Flexi product line, we'll get more algorithms sooner, faster, better."

The implication, then, is that Nortel's LTE product platform itself will not be commercialized. (See Nortel Keeps LTE Dream Alive, T-Mobile Tests LTE, Nortel, LG Are First to Demo Mobile LTE Handover, Nortel Publishes LTE Rates, and Nortel Demos LTE.)

The acquisition of Nortel's LTE radio access assets will augment NSN's own R&D efforts as a "rapid way to get access to talent and know-how," says Rouanne.

The results of the acquisition could be seen early next year. NSN expects some jointly designed Nortel algorithms to be integrated into its first commercial LTE radio access products, which are scheduled to ship in the first quarter of next year. The products will comply with 3rd Generation Partnership Project (3GPP) 's March 2009 release of the LTE standard. (See NSN Beefs Up Its Unified Base Station.)

The algorithms in a cellular base station are essentially the brains of the equipment and, generally, better algorithms yield better system performance.

“NSN’s Flexi base station platform is very software-based,” says Gabriel Brown, senior analyst at Heavy Reading. “Potentially this could make it easier to integrate the Nortel algorithms, assuming a relatively rapid release cycle.”

The Flexi product line is a software-defined, multi-standard base station platform that supports GSM, UMTS, and LTE. The selling point for operators is that getting to LTE, for example, takes just a software upgrade.

Indeed, NSN CEO Simon Beresford-Wylie said on a recent call with the media and analysts that by the end of this year the vendor will have 100,000 base stations installed "just waiting for a software upgrade to LTE." (See LTE Base Station Strategies.)

But why does NSN need Nortel's LTE assets? Unstrung asked Rouanne whether NSN needs the LTE algorithms and software because the Flexi base station isn't up to scratch. His answer: "Absolutely not."

"We have a fully secure and strong product and we want to accelerate that product's capabilities. We want the talent; we want the capability."

The "talent" comprises the 400 engineers dedicated to LTE that NSN will acquire as part of the deal. But since many LTE executives and engineers have already reportedly left Nortel over the first part of this year, that resource may not be what it once was. (See Nortel's LTE Brain Drain.)

And NSN's acquisition deal does not include any of Nortel's LTE intellectual property rights -- OFDMA (Orthogonal Frequency-Division Multiple Access) and MIMO (Multiple Input, Multiple Output) -- which are considered to be the Canadian vendor's crown jewels. (See Nortel Hangs On to Its LTE Smarts and Nortel's LTE Patent Goldmine.)

NSN will also acquire Nortel's CDMA business as part of the $650 million deal (which it hopes to close at the end of this month). Also, in one fell swoop, NSN says it will boost its share of the North American wireless infrastructure market from 5 percent to 30 percent, add about $1 billion to its top line, and gain customer relationships with CDMA operators like Verizon Wireless , which are plotting migrations from CDMA to next-generation LTE. (See NSN: Is Verizon on the Horizon?)

While Rouanne would not comment on Nortel's CDMA products, he says that with the acquisition NSN will become "specialists" in understanding the CDMA-to-LTE migration and "gain insight into how you merge the two networks."

— Michelle Donegan, European Editor, Unstrung

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