LTE in China
Alcatel-Lucent said today that China Telecom will deploy its radio access network equipment to bring LTE to 40 cities across 12 Chinese provinces. The French company said it is one of three vendors selected to deploy LTE equipment for China’s third-largest carrier – China Mobile and China Unicom are first and second, respectively.
China Telecom did not name the other vendors chosen for its LTE deployment, but earlier this month Nokia Networks said that its Flexi Multiradio 10 base stations will be deployed as part of China Telecom’s LTE rollout.
Alcatel-Lucent’s LTE deal with China Telecom follows an initial trial contract award announced in December 2013. The company is supplying both base stations and software as part of its 9926 eNodeB solution.
“Demand for LTE is exploding in China, and with this rollout we will help China Telecom launch services quickly and enable it to maintain its competitive position, offering its customers the ultra-fast broadband speeds and performance they are demanding,” said Luis Martinez Amago, CEO of Alcatel-Lucent Shanghai Bell in a statement.
With 186 million subscribers, China Telecom is larger than any of the U.S. carriers. China Telecom and China Unicom were both awarded FDD-LTE licenses last year by the Chinese government, while China Mobile is deploying TD-LTE.
Currency exposure
As European vendors build their Chinese businesses, their fortunes are becoming more closely tied to the strengthening U.S. dollar, because the Chinese yuan typically moves in tandem with the dollar. Analyst Simon Leopold of Raymond James Equity Research recently adjusted his estimates for Alcatel-Lucent based on the company’s increasing exposure to non-European currencies.
“Alcatel-Lucent indicated that its exposure to the dollar and dollar-related currencies (e.g., the Chinese RMB) is above 60%,” said Leopold.
Raymond James has increased its 2015 revenue estimate for Alcatel-Lucent by 3%, saying that sales made in dollars or dollar-based currencies will translate into higher revenue when those dollars are converted to Euros. On a dollar basis, the firm expects Alcatel-Lucent’s 2015 revenue to come in 6% below its original estimate.
Follow me on Twitter.
