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3G/HSPA

AlcaLu Makes Product Cuts

Evolium 3G pushes up the daisies
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.

Optical squeeze
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

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^Eagle^ 12/5/2012 | 3:14:47 PM
re: AlcaLu Makes Product Cuts Ray,

how about some digging and some real investigative journalism regards the product line cuts. I would especially like more information on the cuts in optical. After all this is the "light" reading site that was originally constructed to cover optical news.

I appreciate the article as far as it went. But how about some real digging for a change. Even if ALU does not want to let us all know what exactly is being discontinued, LR should be able to find out. After all the customer base and supplier base is HUGE. Some calls to carrier contacts, insider contacts etc. and a report back to us would be very helpful.

some good old fashioned journalism instead of re writing press reports.

Thanks in advance.

sailboat
hrdhtr 12/5/2012 | 3:14:47 PM
re: AlcaLu Makes Product Cuts The only surviving(?) product line will be the old Yurie/PSAX stuff. The rest of the products and the bulk of the people who support them are all done.
zoinks! 12/5/2012 | 3:14:46 PM
re: AlcaLu Makes Product Cuts Is that speculation or are you reporting an official announcement???
corwin0 12/5/2012 | 3:14:45 PM
re: AlcaLu Makes Product Cuts To answser the question - take a look at how much NEW revenue LU generated off of Cascade/Ascend in recent years... Now, in a product space where the other internal competition is the 7470 and 7670, which would you pick? The numbers, should, speak for themselves.
materialgirl 12/5/2012 | 3:14:42 PM
re: AlcaLu Makes Product Cuts CSCO is about to eat ALU's breakfast, lunch and dinner. The move to IP networks is taking a surprising turn, in that video dominates, not data. ALU is too data-driven and piece-parts oriented to win. The next build-out is starting soon, and will be done by CSCO. ALU is just too far behind.
tmc1 12/5/2012 | 3:14:40 PM
re: AlcaLu Makes Product Cuts materialgirl,

"get off the (crack)pipe!"

Alcatel has been doing video since the beginning of IPTV... before MS they had another video solution (OMP) which still has over 1M users. They have ALL the major wins in the space TODAY, a dominant solution and partnership, and lots of experience with video. Now with Lucent they have taken over one of the larger existing video deployments with Telefonica.

If anything, the nascent video revolution has provided a paradigm shift away from Cisco... or does ~ 1B in IP router revenue (and growing) for Alcatel IPD in 3 years not count? Most of that at cisco's expense. They have also FORCED cisco to spend billions in acquistions to keep up.

Furthermore, Cisco has no end to end solution and will not because they do not want to get into the low margin access equipment space. Alcatel is doing to Cisco in the SP space what Cisco does to everyone else in the enterprise space. Turnabout is fair play and Service Providers want partners and not companies that just want to cherry pick the high margin products and drop the rest in their lap.
desiEngineer 12/5/2012 | 3:14:39 PM
re: AlcaLu Makes Product Cuts mg,

1. IPTV is a surprising turn? Since the SBC deal for 1.x billion, led by ALU, ALU has been on top of the architecture for triple play.

2. What piece parts are you talking about? Short of buying a set-top player (investment in 2wire, ties with Thomson, notwithstanding), what part of the end-to-end picture has ALU not got? The end software? That's covered with a strong partnership with MSFT.

I've a couple of questions for you - regarding the "next build out":

- How exclusive is SA going to be? Only selling set-tops in csco environments? They will never get the profits if they do that.
- How's csco doing in the access (PON, GPON, FTTx, VDSL, etc.)
- How is the access aggregation? 6500s and 7600s? I don't think so. Long in the tooth.
- How about the edge router? GSR? baby CRS? I don't think so. Wrong features.
- How about the core? Ok, there's the buggy CRS, but it is a cheap core router.
- What about subscriber management? CSCO doesn't really have a good solution here.

So, we've got the set-top box with MSFT software and the core. Don't talk about piece parts. CSCO has never had a system strategy and until goreyo comes out, they don't even have enough parts to say piece parts.

-desi
metrokid 12/5/2012 | 3:14:38 PM
re: AlcaLu Makes Product Cuts please do not mention Telefonica and Alcatel. Telefonica developed Imagenio platform based in Riverstone, yes that company that ALA kill thanks Lucent, and now that I am pretty sure that ALA will kill all the Riverstone products, are you really sure that they will be able to manage this deployment up and running at the same level? let me say, I will not bet for them. They could have many pieces of the puzzle but still do not know how to play with it.

XXX.



kaka 12/5/2012 | 3:14:38 PM
re: AlcaLu Makes Product Cuts If csco doesn't have a system strategy, then who does?
giga 12/5/2012 | 3:14:35 PM
re: AlcaLu Makes Product Cuts where is the cascade product and where are the people left or even in yurie. u can count on finger tips. what about umts redundancy

--giga
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