Moto Hits Euro 3G

Motorola Inc. (NYSE: MOT) today publicly announced it has finally notched up its first European Universal Mobile Telecommunications System (UMTS) deal, exclusively revealed by Unstrung last week (see Moto Preps for Euro 3G ).

The U.S. vendor has struck a small deal with Portugal’s third largest carrier, Optimus Telecomunicacoes, for the supply of UMTS radio access network (RAN) kit in the north of the country (see Moto Wins Euro 3G Deal).

The win sees Motorola replace Nortel Networks Corp. (NYSE/Toronto: NT) as the RAN supplier, and follows a successful four-month trial carried out last summer. Optimus now expects to launch 3G services by the second quarter of this year. Neither firm is revealing the value of the deal.

LM Ericsson (Nasdaq: ERICY) remains the primary 3G supplier to Optimus, providing the core network and radio access network in South Portugal.

Today’s announcement marks the end of a barren period in Motorola’s efforts to win UMTS deals. The company last year failed to deliver on promises it would emerge from 2003 with infrastructure deals from major Western European carriers (see Motorola Blows Hard on Euro 3G ).

Despite the minor impact the deal will have on the 3G landscape, Motorola has been quick to play up the positives, claiming that its kit can be easily integrated with Optimus’s existing core network.

Analysts remain unconvinced as to Motorola’s chances for future high-profile success. “This deal gives them traction to try and get some more agreements, so is significant from that point of view, but they may have to settle for the smaller players,” comments Gartner Inc.’s principal analyst Jason Chapman. “It will still be hard work for them to get into the Tier 1 players, but at least it is a start.”

“It highlights the fact that they were able to integrate their technology with the existing infrastructure in a relatively short period of time,” adds IDC senior analyst Paolo Pescatore. “The question is: Has it come too late for them, given they wanted to make significant strides in this market?”

Pescatore argues that the majority of Europe’s Tier 1 carriers are in the process of rolling out their 3G networks, leaving few lucrative deals left for the picking.

“A lot of the players are at a stage where they are switching on their 3G networks. There will always be scope for contracts in the future to extend capacity, but how willing will operators be to work with another supplier? I doubt they will do that. Operators have learnt their lessons from the GSM and GPRS world, where there were too many integration issues that led to problems.”

Motorola itself is quietly confident that further wins will follow. “You should hear from us later this year,” a spokesperson tells Unstrung.

In light of a rumored 3G trial with established Jordanian customer FastLink last year, a Middle East deployment looks a likely future bet (see Moto Expands in Jordan).

UMTS is the 3G upgrade to the GSM standard, using a wideband-CDMA (W-CDMA) air interface on top of the GSM core network to increase voice capacity and boost data-transfer speeds to a possible 2 Mbit/s.

— Justin Springham, Senior Editor, Europe, Unstrung

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