On consecutive days Nokia Siemens Networks and Ericsson announced deals to supply Softbank Mobile with LTE RAN equipment in support of the operator’s nationwide deployment which is expected to commence during the second half of 2012. In many ways, the consecutive announcements – which highlight nationwide HSPA+ and LTE deployments – overshadows the momentum that Huawei and ZTE have attempted to cultivate.
Daryl Schoolar, Principal Analyst at Ovum commented that, “When a smaller operator like Softbank is brining in four suppliers it shows just how competitive the base station market has become. But, these two announcements, along with Huawei’s previous deployment announcement with Softbank, really puts ZTE’s claim of being Softbank’s primary LTE base station vendor into doubt.”
Then, in a game of “one-upsmanship” amongst the European vendors, NSN pointed out that it will also be supplying microwave backhaul and system integration services. For its part, Ericsson will be deploying an EPC upgrade to Softbank’s existing mobile core, as well as providing system integration services on its portion of the deployment.
Peter Jarich, Service Director at Current Analysis summarized, “Softbank had long been linked to Huawei, making the announcement this week from NSN particularly significant. Followed by Ericsson’s momentum with the operator, the message is clear: There’s room for multiple vendors in new LTE builds and those builds will require more than just RAN gear; they’ll require base stations, backhaul solutions, packet core products, and tightly integrated professional services.”
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Vendor importance
- Momentum: As the pace of LTE deployments increase, contracts for comprehensive, nation-wide, build-outs helps build additional credibility and mindshare with would be customers.
- Comprehensive capabilities: The fact that both vendors were able to showcase deal components beyond the RAN demonstrates that value that operators place on partners that can bring a comprehensive suite of product and services capabilities to an LTE build-out.
- Differentiation: The ability to highlight EPC (Ericsson) and Backhaul (NSN) provides each vendor with a marketing opportunity to highlight complementary technology capabilities that are critical to ensuring successful mobile broadband deployments.
Concerns
- While both announcements led with the RAN, neither company highlighted deployment strategies (e.g., small cells) aimed at providing coverage and/or cell capacity required to enable robust services – such as video sharing, high-definition streaming, etc. – that were highlighted as deployment drivers. Particularly for Ericsson, whose deployment will cover areas that account for 70% of the country’s mobile traffic, other potential LTE customers will be paying attention to how Ericsson helps Softbank over come this challenge.
Opportunities
- For Ericsson, this win represents its largest LTE contract in Japan. Given the population density in the cities where SOFTBANK will be using Ericsson, the Swedish vendor needs to be diligent in highlighting its ability to deliver the capacity and throughput required to enable the rich mobile broadband experience in very challenging environment.
- For NSN, the LTE deployment in tandem with the contract to build a nationwide HSPA+ network for Softbank gives the vendor an opportunity to showcase how its network management system can provide the glue in enabling a seamless, and robust mobile broadband experience by leveraging 3G and 4G network assets.