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AlcaLu's Small Cell Menu: Stake and Chips

Ray Le Maistre
7/30/2013

Alcatel-Lucent confirmed its new "redefined partnership" with Qualcomm Inc. Tuesday morning, noting that the deal is set to be the first of a number of such relationships. (See AlcaLu, Qualcomm Team on Small Cells.)

News of the relationship first broke late Monday and was confirmed as AlcaLu reported its second quarter financials. (See Report: Qualcomm to Take Small Cell Stake in AlcaLu and Charges Slam AlcaLu's Q2.)

The two companies are to collaborate on the development of multimode (3G, 4G, Wi-Fi) small cells designed to enhance wireless broadband coverage and capacity in dense urban areas and inside buildings. They are jointly investing in a small cell R&D program that brings together AlcaLu's lightRadio radio access network (RAN) architecture with Qualcomm's small cell chips.

AlcaLu is not divulging any financial details but is not disputing the Financial Times report that Qualcomm's R&D investment will be worth more than €100 million ($133 million). That R&D investment is separate from the equity element of the new relationship: Qualcomm is buying a small stake in Alcatel-Lucent, a move that does not involve the issue of any new shares. But as the stake is smaller than 5 percent, the company is not obliged to share any details.

So are there any other similar R&D-plus-equity investment deals in the pipeline? On Tuesday's second quarter conference call, CEO Michel Combes noted that he had envisaged between three and five relationships, but added that he is focused "on the content of the partnerships rather than the number of them ... the driver is the industrial logic."

Further collaborations are likely to be announced "with other industry names" in the coming quarters, he added, noting that the aggregate equity stake sold through such relationships would not total more than 5 percent of AlcaLu's capital.

Combes added that the Qualcomm relationship should result in a faster time to market for multimode small cells, initially for enterprise deployments, followed by products for residential deployments and later, possibly, even for metro area products.

"We expect to be quicker to market with a best in class product. Qualcomm has a very efficient chipset with low power consumption. We expect to be first to market with multimode small cells," added the CEO. (See SpiderCloud: Cisco 'Naïve' on Small Cells.)

So which other "names" might end up with a small stake in AlcaLu? Spokesman Simon Poulter told Light Reading that while there are no specific names that can be shared currently, he noted that AlcaLu is looking for further "redefined partnerships ... taking an existing relationship to a new level."

— Ray Le Maistre, Editor-in-Chief, Light Reading

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Ray Le Maistre
Ray Le Maistre
8/5/2013 | 6:30:45 AM
re: AlcaLu's Small Cell Menu: Stake and Chips
haha - no worries. we will very soon have a new message board interface that will be easier to use.
sfxu_pisces
sfxu_pisces
8/5/2013 | 6:00:01 AM
re: AlcaLu's Small Cell Menu: Stake and Chips
Ok, My fault, I do not want to vote it down, I just saw the ... and a downside arrow, I assume some of your comment was hidden and have to click the downside arrow to see all of them. :(
MordyK
MordyK
7/30/2013 | 5:55:41 PM
re: AlcaLu's Small Cell Menu: Stake and Chips
ALU wasn't getting much adoption of its femto chips so this makes sense, but I wonder how this will effect their position long term with other vendors...
Sarah Thomas
Sarah Thomas
7/30/2013 | 2:52:37 PM
re: AlcaLu's Small Cell Menu: Stake and Chips
This is a really interesting partnership. As I wrote about earlier this month, Qualcomm is making big strides with Wi-Fi through the CnE tech in its chips: http://www.lightreading.com/bl.... That's knowledge that will come into play in multimode small cells. This partnership will be a big boon to AlcaLu.
Ray Le Maistre
Ray Le Maistre
7/30/2013 | 1:15:56 PM
re: AlcaLu's Small Cell Menu: Stake and Chips
Mobile was an area where there were a lot of doubts being cast on Alcatel-Lucent's potential longevity -- this relationship gives it much greater credibility and could be a critical landmark in the lightRadio story. Qualcomm will want to see this fly...
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