NEW YORK-Siemens AG’s equipment is not part of Cingular Wireless L.L.C.’s 16-city UMTS/HSDPA rollout, according to UBS Investment Research, which stands as a blow to the equipment provider. Further, Siemens’ absence brings into question the company’s future 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 to $65 million in 2006, assuming Cingular spends approximately $1 billion deploying 3G next year.”
Cingular said its next-generation network is initially 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.
