Siemens AG’s equipment is not part of Cingular Wireless L.L.C.’s initial 16-city UMTS/HSDPA rollout, according to UBS Investment Research. The situation stands as a blow to the equipment provider, and could call into question Siemens’ future relationship with Cingular.
UBS said Cingular deployed radio access infrastructure from L.M. Ericsson and Lucent Technologies Inc. in its initial UMTS/HSDPA rollout. UBS noted that in late November Cingular awarded Ericsson and Lucent each 35 to 40 percent of its W-CDMA and HSDPA network infrastructure contracts, while it awarded Siemens around 20 to 30 percent.
However, UBS explained that, based on its industry checks, “we believe half the announced markets contained Ericsson radio access infrastructure with the other half using equipment from Lucent. Noticeably absent, in our view, were cities that we believe are deploying radio access infrastructure from Siemens.
“Given our view that Siemens radio access infrastructure was not used in any of Cingular’s launch cities, we believe this calls into question Siemens’ long-term positioning at Cingular. In particular, Cingular’s corporate headquarters are in Atlanta, Ga.-a city noticeably absent from the group of 16 3G launch cities. We believe Atlanta, as well as other Southeast and Midwest cities, were originally designated for Siemens radio access infrastructure.”
Cingular and Siemens did not return calls for comments.
In the report, UBS also commented that Ericsson and Lucent could stand to gain from the situation.
“We view a potential displacement of Siemens for radio access infrastructure as positive for Ericsson and Lucent,” UBS said. “Should each vendor capture an additional 10- to 15-percent market share, we believe both Ericsson and Lucent could see an additional $50 million to $65 million in 2006, assuming Cingular spends approximately $1 billion deploying 3G next year.”
Cingular said its next-generation network is available in 16 markets covering nearly 35 million potential customers in Dallas, Houston and Austin, Texas; Baltimore; Boston; Chicago; Las Vegas; Phoenix; Portland, Ore.; Salt Lake City; San Diego, San Francisco and San Jose, Calif.; Seattle and Tacoma, Washington; and Washington, D.C.
The launch is the first wide-scale commercial deployment of HSDPA technology in the world, and Cingular has said it expects to roll out UMTS/HSDPA capabilities to most major markets by the end of next year.
Meanwhile, Siemens Venture Capital invested in AirTight Networks, a security provider for Wi-Fi networks.
AirTight said it closed on a second round of financing valued at $12 million. The round raises the total amount of capital invested in AirTight to $22.5 million.
Trident Capital led the latest round of funding, and also was one of the company’s first-round investors. Trident Capital’s managing director, John Moragne, now sits on AirTight’s board of directors.
“Trident Capital has a strong focus on security technology, and we’re excited about AirTight’s tremendous potential as a market leader in a rapidly emerging space,” said Moragne. “Over 97 percent of all enterprises have wired perimeter security solutions today, but less than 2 percent have the equivalent wireless perimeter security functionality. AirTight has won a number of important head-to-head bake-offs against its competition. The company is executing very well and we are committed to AirTight’s success.”
Although Siemens Venture Capital is a newcomer to AirTight’s list of investors, all of AirTight’s first-round investors also participated in the company’s second round.
“Siemens Venture Capital invests in companies that complement our corporate vision and technology strategy in the networking and communications industry,” said Louis Rajczi, investment partner at Siemens Venture Capital. “AirTight’s position as a leader in the wireless perimeter security market is a good fit with our perspective on how wireless technologies will pervade the enterprise and public network markets, and the corresponding need to secure these network connections.”
AirTight explained that its development team focuses on maintaining network and mobile client integrity from Wi-Fi security vulnerabilities.
