Global Insight Perspective | |
Significance | Nortel has announced contract wins in the WiMAX, optical networking, multimedia, and VoIP space. |
Implications | While Nortel has sold its UMTS assets, these wins reflect its continued exposure to high-growth segments. |
Outlook | Nortel will hope to win 3G contract in China next year, but competition will be intense. |
Shortly following the sale of its UMTS assets to Alcatel (see World: 1 September 2006: Alcatel to Pay US$320 mil. for Nortel UMTS Unit), Nortel has shown that it is business as usual with a raft of new contract wins.
- Greece: Craig Wireless, a North American wireless provider, has chosen Nortel's WiMAX solution to power its "Internet Everywhere" services including VoIP, videoconferencing, and interactive gaming in Greece. The new network will be targeted at areas that lack xDSL-based broadband coverage. Craig Wireless plans to complete the first stage of the network deployment, providing coverage of Athens, Heraklion, Patras, and Thessaloniki, by the end of October 2006. Nationwide deployment is set for 2007.
- Russia: Nortel has contracted for a next-generation network with integrated multimedia platform with COMCOR, the group of alternative operators in Russia. The IMS-ready incorporates Nortel's Communication Server 2000 softswitch (which supports SIP and H.323 protocols), the Nortel Media Gateway 15000 Trunk Gateway as a PSTN gateway, and the Nortel Border Control Point 7200 which provides a secure media proxy SIP-server. COMCOR will exploit the network upgrade, set to be completed in late 2006, to provide IP telephony services to some 30,000 subscribers in Moscow with the capacity to serve some 0.5 million.
- Russia: Nortel has a contract with Golden Telecom, a leading Russian alternative operator, to extend its next-generation optical network to the east of Russia. The optical network will support the transport networking for TDM and Ethernet traffic and provide links with capacities of between 2.5 Gbps and 10 Gbps and an upgrade path to 40 Gbps. The network will support the transmission of both current services and future IMS-based services such as IP TV. As well as expanding the geographical reach of its optical fibre network to higher than its current coverage of 45% of the population, Golden Telecom will also upgrade its backbone to DWDM.
- Switzerland: Nortel announced that Swisscom had launched business VoIP services, including VoIP Phone and VoIP Gate, on the basis of Nortel's carrier-hosted VoIP business solution. The solution incorporates Nortel's Communication Server 2000-Compact, a carrier-grade softswitch, as well as services from the Canadian vendor's Global Services portfolio, including OSS/BSS and billing integration and service development support.
Outlook and Implications
- Challenges Aplenty: Nortel continues to pick in the optical networking, WiMAX, mobile, and enterprise spheres, but it faces intense competition in these segments. The strengthening of Alcatel-Lucent and Nokia-Siemens to provide end-to-end solutions, as fierce rivalry grows for the expected wave of 3G contracts in China in 2007 and beyond, will make for a particularly challenging environment for the Canadian vendor. Nortel's exit from the UMTS market will mean that it will be limited to competing for CDMA 2000 and TD-SCDMA contracts.
- Towards 4G: While Nortel has pulled out of UMTS, its chief Mike Zafirovski has emphasised the company's strong position in the emerging 4G market. At a recent press event, Zafirovski highlighted the lack of success of 3G and said that the 70 patents it holds for OFDM and MIMO will be key to future generations of both W-CDMA and CDMA 2000 1X EV-DO. Nevertheless, it is unclear whether the lack of a mobile killer application other than voice or SMS will make 4G any more successful than 3G.