In the sweepstakes of third-generation (3G) contracts, smaller equipment vendors hope to outplay the bigger names by taking advantage of their product strengths and delays in Universal Mobile Telecommunications System (UMTS) rollouts.
Companies like Motorola, Nortel Networks and Lucent Technologies are at the low ebb of UMTS contracts, but said they do not count themselves out because carriers, especially in Europe and Asia, are searching for the vendors with the most competitive offerings.
The contract leaderboard features Ericsson, Nokia and Siemens. But some carriers, especially Orange and MmO2, have publicly indicated they are re-evaluating their contracts, reinforcing industry fears that the hierarchy of contracts could crumble if the carriers find compelling alternatives.
“It’s still early,” said Peter Jarich, senior analyst with Current Analysis, echoing some views that most of the contracts signed and announced are mainly memorandums of understanding and letters of intent. MOUs do help to create meaningful relationships with the carriers for future deals, Jarich commented.
Some industry watchers think Nortel and Lucent could win more 3G contracts because of their strengths in integrating Internet Protocol (IP) into their infrastructure packages. Motorola, ever envied for its radio access products, has fallen out of the UMTS contract radar because of the absence of switch and core network heft.
But the U.S.-based company said that’s about to change. Motorola said it plans to roll out its full complement of infrastructure equipment from backhaul through the switch to the front end, touting its softswitch, commented Adrian Nemcek, executive vice president of Motorola and president and chief executive officer of the company’s global telecom solutions sector. Winphoria is providing the softswitch to Motorola.
Nemcek said the switch, which has been the company’s main Achilles’ heel, will be available in 2004, enhancing the company’s chances for 3G contracts that have yet to be nailed down or are being rebid.
Motorola’s lack of significant 3G contracts earlier fueled speculation that Siemens or Nortel would buy the company’s infrastructure division. No one confirmed these talks, but the whisperings underscored some people’s beliefs that Motorola could not match its rivals.
Nortel has insisted that IP lies at the core of any definitive 3G contracts. In spite of its fewer contract wins, it hopes to turn the table against the bigger players. The company has announced 11 contracts for UMTS networks, some of them with MmO2, T-Mobile International, Omnitel Vodafone and Optimus.
Lucent also is hinging its strategy on IP capacity. It has only two UMTS contracts, although its emphasis has been on cdma2000, where it enjoys more than 20 contracts. Its UMTS contracts are with Telef
