MURRAY HILL, N.J.-Lucent Technologies Inc. has taken a page from Ericsson Inc. and Cisco Systems Inc., each of which now dominate in certain areas of telecommunications infrastructure provision, said Richard A. McGinn, Lucent’s chairman and chief executive officer.
“In the communications networking market for service providers, we are a small player in [Global Systems for Mobile communications], but we are growing on a small base,” he said at Lucent’s Global Media Day, Nov. 12.
“In 3G, we are directly focused on creating a No. 1 spot against Ericsson, a very able competitor.”
Jim Brewington, group president of Lucent’s Network Wireless Group, said the company has increased its product portfolio in spread spectrum technology, on which Universal Mobile Telecommunications Systems, a third-generation standard, is based.
“Believe me, we’ll invest a ton of money in 3G (research and development), way more than $1 billion, probably approaching $2 billion. I am the biggest (R&D) spender at Lucent,” Brewington said.
“In 2000, there will be lots and lots of trials. We are contributing to industry standards groups, but we are not waiting for UMTS or cdma2000.”
In second-generation wireless, Lucent began with Time Division Multiple Access technology, moving on to Code Division Multiple Access and more recently to GSM.
Earlier this year, AT&T Wireless Services Inc. called Lucent in to help upgrade portions of its highly popular and overworked New York metropolitan area TDMA network, which Ericsson had supplied.
“It wasn’t so long ago people said TDMA lacked capacity, but next year they’ll say `this wireless stuff really works in New York,’ ” Brewington said.
Lucent also has applied to TDMA the General Packet Radio Service and EDGE vehicles designed for GSM, giving “the ability for GSM and TDMA to converge,” he added.
Compared with Cisco’s status as a supplier of enterprise networking, McGinn described the company he heads as an afterthought, and added, “That will be addressed. “
However, the chief executive advised, “We won’t acquire a legacy data networking system from someone to try to out-Cisco Cisco by putting another router in place.”
Lucent sees routers as a technology whose heyday is passing with the advancement of Internet capabilities.
“Applications are being written to the Internet. Optics are declining in price (as are) the levels of switching required. There will be a convergence of service provider, enterprise and virtual private networks,” McGinn said.
“Wireless systems are based enormously on software, far more than [radio frequency] and switching. Network management software is becoming ubiquitous.”
Lucent recently took steps to reorganize its business strategy to become more of a network integrator for carriers.
“Time-to-market demands on telecommunications service providers have caused them to move from knitting together individual pieces to looking for best-of-breed solutions,” McGinn said.
“They are asking companies like Lucent to be network integrators, and we have changed our business to respond to that effort more competently.”
McGinn said he sees the telecommunications carrier market as comprised of three parts-a few large companies, a few mid-size companies and many small companies.
“Some carriers have chosen to do more than one large thing,” said Curt Sanford, group president of InterNetworking Systems.
“But by and large, we’re seeing more and more specialization. Today, there are companies that just specialize in radio towers or that just lay down fiber.”
Fiber optics is becoming an increasingly important part of many telecommunications networks, said Harry Bosco, senior vice president and chief technical officer.
“The world will go from bits to wavelengths, which cross networks without layers of electronics processing to slow it down. The world wide wait will become the instant Internet,” he said.
“You can lay that fiber in, and the last link will be wireless or something like OpticAir.”
OpticAir, which Lucent expects to release commercially by year-end, uses diffused laser beams for communications transmission.
“It has problems if there is a lot of fog or the distance is too far,” Bosco said.
“But a Winstar (Communications Inc.) could use it to get into buildings to offer high-capacity service. And the Qwests of the world would see this as an opportunity to serve business customers for a fast (service) rollout or to close an incomplete fiber ring temporarily.”
