Tellabs Scoops Two Russian Backhaul Deals

Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) announced on Tuesday that it will supply backhaul equipment to Russia's two biggest mobile operators, Mobile TeleSystems OJSC (MTS) (NYSE: MBT) and MegaFon , as they build out their 3G networks and brace for strong mobile data growth. (See Tellabs Nabs Russian Backhaul Deals .)

MTS, Russia's largest mobile operator, with 71.4 million subscribers at the end of 2010, will deploy Tellabs's 8600 managed edge system and has designated the vendor as a strategic supplier.

MegaFon, the second-largest mobile operator with 55.6 million customers at the end of 2010, is building out an IP backhaul network across the country. For this project, Nokia Networks is the systems integrator partner and NSN will use Tellabs's backhaul equipment along with Juniper Networks Inc. (NYSE: JNPR)'s MX Series 3D universal edge routers and EX series Ethernet switches. (See Russian Mobile Op Taps Juniper .)

Why this matters
These are big, muscle-flexing deals for Tellabs, even though the financial details were not revealed. In the fast-growing Russian mobile market, MTS and MegaFon had 31.8 percent and 24.8 percent market shares respectively at the end of 2010, according to Pyramid Research .

The need for bigger backhaul pipes is clear as mobile data is set to explode there, thanks in part to the ambitious plans of second-placed challenger MegaFon. Mobile data services accounted for 22 percent of MegaFon's 2010 revenues.

"MegaFon is the most aggressive in terms of 3G," says Sylwia Boguszewska, an analyst at Pyramid Research. "They have invested a lot in 3G and plan to expand 3G to 95 percent of the population this year.

Data services are becoming an area of focus [for the operators] because there is really strong competition," she says. "The mobile phone subscriber penetration is 160 percent."

From a technology point of view, it is also significant that Russia's largest mobile operators are migrating to IP-based backhaul networks. The moves are more proof that operators are overcoming their worries about packet backhaul and are deploying in volume. (See Ethernet Europe: Busting the Backhaul Bottleneck , At Last: Ethernet Backhaul Booms for Carriers and Packet Backhaul Busts the 'Pain Barrier'.)

For more
These contracts are a shot of good news for Tellabs leading up to its first-quarter report, which will be released on April 26, following a particularly weak fourth quarter.

— Michelle Donegan, European Editor, Light Reading Mobile

Algor 12/5/2012 | 5:06:52 PM
re: Tellabs Scoops Two Russian Backhaul Deals

Actually, Russian Mobile carriers, including MegaFon, start migration to IP Mobile Bachole in 2007 - 4 years ago. So, this news is not about Russian carriers migrate to IP Mobile backhole, but just Tellabs take part in one of project.

MegaFon have build all network on over vendor and just let NSN with Tellabs deliver equipment for one of subregion as alternative vendor.

Sign In