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12/5/2012 | 4:07:39 AM
re: Nortel & Huawei: Broadband Buddies

What you describe is how it was 10 years ago. I was on Nortel's MCI account team when we had 90%+ of their business. We had to fight for everything though we basically 'owned' MCI, and there was no second source. Gradually that changed and Nortel started to lose.

With the SBC and Verizon acquisitions I see some plateau-ing of vendors as decisions are made in the new entities but there are always ways in. If there wasn't every startup should fold up and go home today. Even the major equipment suppliers wouldn't be able to get a toe-hold. That is an attitude that will not yield results, in any timeframe.

I wouldn't be too sure of my position if I was on Alcatel's AT&T account team right now, same for Nortel's MCI account. Change represents opportunity but there is also great risk. I would say that the vendor decisions will greatly depend on who will be sitting in what chair when the transition music stops and the relationships that the vendors have with the people in those chairs.

12/5/2012 | 4:07:32 AM
re: Nortel & Huawei: Broadband Buddies

There are massive rollouts of IP DSLAM by Huawei in Markets that normally the US press does not cover.
Here in Brazil, for Telemar (the biggest fixed telephony operator), Huawei is almost supplanting the leading Alcatel spot.

This comment is just for reference, not to question the validity if the JV.

"Generally, I think either a major customer opportunity or a specific market opportunity drives that common set of objectives.

Take a look a the Access section of the Huawei website. They have:

- A BLC: Hmmmm Ciena (Catena) can't make a dent, where will that be sold? The IOCs? Nortel is going back to the DLC market in the IOCs? That will go over like a fart in church. They have to completely rework the CO Voice Interfaces before they have a product.

- An IP DSLAM: Okay, who are they displacing and in what customers? The big guys have all picked their access architecture for the some time. Anybody see any major RFPs coming?

- A BRAS: Going after whom again? The major customers have their choices.

- An IP Voice Gateway: See the MG9000. Nortel has a product in this space for sale with the CS2000.

- An Active FTTH Product: Go after the municipalities? There is an EPON variant? Again, to whom? Bell Canada and Telus?

The biggest news out of this is the death of the Calix/Nortel relationship is in the public domain.

12/5/2012 | 4:07:31 AM
re: Nortel & Huawei: Broadband Buddies

"There are massive rollouts of IP DSLAM by Huawei in Markets that normally the US press does not cover. Here in Brazil, for Telemar (the biggest fixed telephony operator), Huawei is almost supplanting the leading Alcatel spot."

I think there are a few things about this JV that are potentially interesting. As seven has alluded to Nortel has pretty much missed the boat on access in NA, but that industry is really just hitting its stride worldwide, where Huawei is strongest. I have held for quite some time that there is still a very large access market available in NA but it is more in the sub-urban and rural markets. Seven and I disagree a bit on the more urban markets but I will grant that they are now a much harder nut to crack.

Here is the thing with access: it takes a long time to get serious penetration in access. Doing fiber buildouts or FTTC/FTTN-type architectures don't happen overnight. Installing new CPE in consumer's homes is a logistically intensive process and will take years. The same holds for NA and anywhere else, especially where monopolies are not active (or if they are, the delay will be due to other factors).

Nortel wins on this front as they get to play in the worldwide access market much quicker than if they tried to grow it themselves. Huawei wins in that any developments in the NA market that are brought about with Nortel's market clout can be quickly turned into international plays.

The key will be in the execution.

12/5/2012 | 4:07:27 AM
re: Nortel & Huawei: Broadband Buddies
Quite a risky JV and it is not the work of MikeZ because as Megura said, discussions had been on-going long before MikeZ came on board.
At any rate, there are significant overlaps between JV parties on almost all of Nortel product portfolios (especially in the Wireless arena which is Nortel's growth area to certain extent) and they will come to compete head to head going forward. You do not have to wonder who is going to be cheaper when Huawei has been known (and can afford) to sell aggressively below cost simply to win accounts. Coupled with the fact that the JV gives Huawei more credibility, I wonder who is going to be left holding the bag in few years from now. Add to it the dismal record of Nortel in managing its own past acquisitions and things could start to look even more bleak than ever before...
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