wireless broadband

Nortel loses another arm as Hitachi steps in for LTE bits

Continuing its bankruptcy-ignited fire sale, Nortel announced that it has struck a deal with Tokyo-based electronics heavyweight Hitachi to part with a piece of its Long-Term Evolution (LTE) business — specifically, “certain assets associated with the development of next generation packet core network components,” according to a press release — for $10 million. Not that it’s trying to be cryptic or anything.

Of course, Hitachi will face lots of LTE competition from other vendors. Despite that, the insolvent Toronto-based vendor said:

Under the agreement, the assets include software to support the transfer of data over existing wireless networks and the next generation of wireless communications technology, including relevant non-patent intellectual property, equipment and other related tangible assets, as well as a non-exclusive license of certain relevant patents and other intellectual property.

Nortel said the agreement excludes legacy packet core components for its global system for mobile communications (GSM) and universal mobile telecommunications system (UMTS) businesses. Its GSM and GSM-Railway businesses are slated for an open auction on Nov. 9.

While Monday’s announcement did drop some new information on the asset front, the song remained the same for Nortel’s embattled shareholders.

New report declares WiMAX a “niche technology” in emerging markets

A couple of years ago, WiMAX was going to be the winner in emerging wireless broadband markets…so said the pundits. Now a new Ovum research report is relegating WiMAX to “niche” technology status. Why niche? Ovum analyst Angel Dobardziev says it’s a combination of technology cost, coverage, vendor support and service provider choices.

The key stumbling block is the cost of customer equipment, which will limit WiMAX use outside business customers, he said.

“WiMAX will play a role, but it will be a far smaller one than many WiMAX players would accept today, WiMAX will fall short of the grand hope of being a mass market broadband technology in emerging markets,” Dobardziev said, estimating that WiMAX will account for less than 5% of the 1.5 billion fixed and mobile broadband access connections in the emerging markets in 2014.

The original hope was that in areas with little existing infrastructure, WiMAX would be the logical Greenfield choice for wireless broadband, but Ovum questions whether there is a really big market for WiMAX in emerging markets. A full two-thirds of the world’s WiMAX networks will be in emerging markets in Africa, Asia, Eastern Europe, the Middle East and Latin America, but they will have low uptake, Dobardziev said.

“On a non-subsidized basis, it is currently priced and positioned as a broadband option only for businesses or wealthy consumers,” he said. “The cost of customer equipment (CE) remains the key stumbling block for WiMAX operators, where both DSL and HSPA outperform WiMAX with significantly greater economies of scale.”

RIM’s Nortel interest adds more drama to ‘final’ bid

Why on earth would RIM want Nortel? That was the question on everyone’s minds after the handset manufacturer announced it had not only tried to enter bidding for the distressed Nortel’s LTE and CDMA assets, but had been “prevented” from fairly competing for those assets due to bidding restrictions.

And while Ericsson eventually emerged victorious in bidding, industry watchers were left scratching their heads, and legislators seem to at least be considering the merits of RIM’s complaint. What if the Waterloo-based BlackBerry maker was successful in a re-auction and it won?

The company has given little indication of why they are so intent on the Nortel wireless assets, beyond the stated desire to keep Nortel Canadian, but RIM does have experience in building out some infrastructure in order to power its central NOC. Perhaps the company has seen infrastructure as a critical competitive asset, and one that will further separate it from the pack just as its e-mail advantage has in the past. Another theory is that RIM is trying to jump on the LTE bandwagon early, and it sees the Nortel opportunity as the perfect way to jump past its competitors in this area.

Whatever the motivation, with Canadian national pride and billions of dollars in local jobs at stake, the supposedly final Ericsson purchase might not be so final after all.

Wi-Fi: You can take it with you

Being neither 3G nor 4G, Wi-Fi, with its “no G” status, is much in the news these days, which goes to show that beyond the next-gen hype, there’s life (and competition) in Wi-Fi yet.

First let’s look at Qwest, which is offering its high-speed Internet customers a good deal — free Qwest Wi-Fi access at 17,000 hot spots nationwide. Qwest Wi-Fi is actually rebranded AT&T Wi-Fi, so there’s no doubt a wholesale deal in place. Some years ago, this deal would have been unthinkably anti-competitive, but both of the former Baby Bells operate in completely separate wireline territories, and Qwest doesn’t own any wireless assets. So why not?

Continued »

Mobile broadband forecast: There’s no joy in ARPU

The good news, according to global consulting firm Ovum, may be that users accessing mobile broadband-enabled laptops and handsets will increase revenue by more than 450% in 2014 compared to 2008. Mobile broadband adoption, of course, means 3G and 4G mobile data technology adoption. Projected revenue? $137 billion globally.

But wait, there’s a downside. Mobile broadband growth refers to increases in the number of users and the amount of data traffic. But the joy doesn’t spread to average revenue per user (ARPU), Ovum says. Instead wireless ARPU is expected to drop significantly during mobile broadband’s meteoric rise, with projected growth of only 44% of the rate of total users — a dilemma also faced by wireline network carriers.

Continued »

Alcatel-Lucent’s earnings: Moving to half-full

It’s much harder to see the glass as half-full when you’re used to half-empty — or completely empty. Enter Alcatel-Lucent’s 2008 year-end financial results and its $6.2 billion loss. So it may not sound like it at first, but there’s something in that glass, and CEO Ben Verwaayen, who took the top post in September 2008, is starting to hear the Perrier fizz.

Alcatel-Lucent stock went up after the Q4 ‘08 earnings report (released Feb. 4) -– which isn’t easy to do this year. The new chief sees positive signs in things like cash flow being at its highest level in two years, as he explained his view of the company in a BusinessWeek interview. The company plans to make good on promises made last December to reorganize and refocus its strategy, and that means less emphasis on traditional products (read telephone switching equipment).

Verwaayen is shifting the company’s focus to services and Internet-related technologies, while placing less emphasis on traditional products like telephone-switching equipment. The analyst community sees Alcatel-Lucent as doing what it promised.

As part of its new strategy, Alcatel-lucent isn’t trying to do everything itself. To address certain hardware maintenance and expense, Verwaayen said the company may outsource legacy equipment servicing to established vendors that could “co-partner” with Alcatel-Lucent.

And to gain some nimble startup advantages — which is like turning the Titanic for a company the size of Alcatel-Lucent — Verwaayen said the company has asked its Bell Labs research division and its carrier product group to keep an eye out for innovative startups and work with them.

In December, Verwaayen said Alcatel-Lucent would focus on four broad areas in 2009: IP, optical, fixed-line broadband and mobile broadband (particularly Long-Term Evolution, or LTE).

In terms of strategy and services, Tom Nolle’s commentary, Telecom operators need vendor help to justify new investment benefits, discusses how Alcatel-Lucent is one of the main vendors that could help service providers sort out their next-generation network architectures. But only if it can get out of its own way and move forward with the new strategy.

Mobile’s “Perfect Storm”: Mandated upgrade vs. the economy

Infonetics Research’s latest whitepaper looks at the “perfect storm” that is forcing mobile operators to upgrade their networks and their business models, even if economic conditions would normally dictate otherwise, and offers strategies to cope with the changes (but you’ll have to download the whitepaper for those).

This free whitepaper download on the Mobile Internet Transformation looks at the four mobile broadband trends that are presenting as many problems as they are opportunities for operators.

So what’s driving the 400%-to-800% year-over-year traffic increases in some locations?:

The bottom line? Waiting out the recession could result in the “Perfect Disaster.”