AlcaLu Makes Product Cuts
Alcatel's home-grown 3G base station is no more. It is an ex product. That much was confirmed in response to an analyst question. Alcatel-Lucent CFO Jean-Pascal Beaufret confirmed that 6,000 Evolium base stations are being ripped out and replaced by Node B UMTS access products acquired from Nortel Networks Ltd. . (See Alcatel Snags Nortel 3G Unit.)
The CFO also noted that €150 million in fourth-quarter charges was related to the discontinuation of that product line.
What this means, in essence, is that a number of small regional operators, and one major operator, are getting better 3G technology. That one major is Orange (NYSE: FTE)'s national mobile operator, Orange France , which deployed Alcatel 3G equipment in Paris, where Alcatel-Lucent has its headquarters. (See Alcatel Trials HSDPA.)
But if Alcatel's 3G base stations have been stamped "end-of-life" and forklifted to the recycling plant, what does that mean for the former Lucent UMTS access gear? It had only one major customer, but what a customer -- Cingular Wireless . (See Lucent, Cingular Prep HSDPA.)
That didn't crop up in the analyst Q&A, and AlcaLu isn't commenting on its status.
The vendor continues to push the message, though, that its roadmap includes the development of next-generation 3G radio access equipment that will incorporate "best of breed" elements from the Nortel, Lucent, and Alcatel lines.
The other division to have taken a hit on product rationalization is optical, but the vendor is not providing any further details about exactly what's been terminated there.
Only a few weeks ago, though, the message coming from that division's head of marketing, Tom Goodwin, was that all products (about 20 in total inherited from Alcatel and Lucent) are being supported, and that all commitments to existing customers are being honored. He added, though, that some of the more legacy platforms would be "bid only on a tactical basis."
He told Light Reading that "we are looking at the synergies, the installed base, the current customers, the market forecast, and expectations of future demand," and that decisions would be made about how to move towards an all-packet transport platform.
He also said that, at the time, no products had been terminated. "We are not going to pull products out of the market that are being used by existing customers." That means that some competing products, such as the Alcatel 1696 Metrospan and Lucent's Metropolis Wavelength Services Manager (WSM), will continue to coexist.
Goodwin said that, "where we have a conflict, when [different] products are deployed in the same network, we focus on how they can coexist, and how to migrate to the next-generation path. It's a growth and evolution issue."
Goodwin also said that Alcatel-Lucent will be introducing new products and has the resources to manage what it already has. "I would expect our competitors to pick away at us," but "we understand how the optical markets are going to transform, and we have the best portfolio. We are the market share leader in nearly all markets."
— Ray Le Maistre, International News Editor, Light Reading
2 of 2