NSN Keeps LTE Promise with Flexi Multimode – Preparing for Multi-standard Battle with Competitors

| Oct 17, 2008 | Wireless Infrastructure | Competitive Update

| Analyst: Peter Jarich

Current Perspective: Very Positive
Vendor Importance: High
Market Impact: Moderate

Event Summary

October 15, 2008 – Nokia Siemens Networks (NSN) announced the availability of its Flexi Multimode Base Station; shipments 10+ major operators worldwide are planned by year end. Compatible with LTE operations, the Flexi Multimode can be upgraded to support LTE with a software upgrade planned for availability in the second half of 2009. Beyond its new base station hardware, NSN highlighted its LTE demonstrations and standards contributions in support of commercial LTE rollouts planned for 2010.

Analytical Summary

• Current Perspective: Very positive on Nokia Siemens Networks (NSN) announcement of the Flexi Multimode Base Station and its support for LTE going forward. A lack of support for GSM or CDMA (or WiMAX) will, doubtless, disappoint some operators. Regardless, the new multi-standard offer makes good on NSN’s promises from earlier in the year while pointing to the value of the Flexi platform and addressing operator demands for a migration path from current 3G investments to future 4G services.

• Vendor Importance: High to NSN because the company’s competitors are all working on and releasing their own multi-standard base stations with roadmaps that take operators to LTE. Again, NSN promised the Flexi Multimode earlier this year. And, again, support for migrations from HSPA through HSPA+ and LTE are something that operators are clamoring for. These operator demands, however, result in a deep commitment to multi-standard base stations and LTE product evolutions from all of NSN’s competitors – making it imperative for NSN to announce its support, particularly if it can project technical leadership by releasing upgradeable kit before more other vendors.

• Market Impact: Moderate on the wireless infrastructure market because the move to multi-standard base stations and LTE upgrades is a well understood market trend. Huawei has been talking up its multi-standard product for most of the year with its “single RAN” launch in September promising LTE support. Ericsson’s touted RBS 6000 series promises support for GSM through LTE and most other vendors have similar strategies. Regardless, NSN’s launch does bring new visibility to operator LTE strategies, putting competitors in a position where they need to explain their own plans.

Recommended Competitor Actions

• Alcatel-Lucent needs to better message their multi-standard base station assets. For its part, the vendor can support GSM and UMTS from the same base station today, with promises of common power amplifier and OMC assets supporting LTE going forward. That said, the company has not been as vocal about its multi-standard aspirations and competitors; as competitors use 4G upgrades to drive network renewals, every vendor will need to compete based on the OpEx saving synergies from multi-standard operations.

• Alcatel-Lucent needs to provide more detail on the progress of its LTE R&D joint venture with NEC. When the company announced its relationship with NEC this spring, the opportunity to work with a Japanese vendor linked into DoCoMo’s LTE plans was highly touted. Eight months later, operators looking at Alcatel-Lucent’s LTE solution will want to know how the JV’s work is progressing, and what, exactly, each vendor is contributing to it.

• Ericsson needs to provide an update on the status of its RBS 6000 series base station portfolio. The foundation of Ericsson’s next-generation RAN offer, the 6000 series will support GSM, WCDMA and LTE. We’ll doubtless hear more about the offer at the 2009 version of Mobile World Congress. Yet, as competitors roll out their multi-standard offers with support for LTE, Ericsson should not wait another four months to explain that R&D on the platform is on track and how it will perform.

• Huawei should consider releasing case studies of its new multi-standard base station deployments. Launching its multi-standard BTS offer earlier this year, the Chinese vendor has made network renewal opportunities a lynchpin of its wireless strategy. To prove its capabilities (and explain the economic rationale of replacing perfectly functional 2G or 3G base station), the vendor must go public with details about this brand of wins – wins such as TELUS and BCE in Canada and O2 in Germany.

• ZTE needs to follow Huawei’s lead on multi-standard base stations. For a number of reasons, ZTE often resides in Huawei’s shadow: it can’t match Huawei’s sales or market mindshare. That said, like Huawei, the company has made a multi-standard base station the core of future wireless plans. As with Huawei, the ZTE strategy could pay dividends as operators look to shave OpEx when upgrading to 3G and 4G. More so than Huawei, however, ZTE will need to convince operators of its capabilities and the rationale of its upgrade strategy.

• Nortel and Motorola need to update the market on their plans surrounding LTE. For its part, Nortel needs to address the confusion created when its CEO vaguely stated that the company would attempt to limit its exposure to LTE. Motorola, in turn, needs to explain how it will turn its WiMAX expertise into LTE assets while overcoming the handicap of a non-existent WCDMA business.

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Competitive Positives and Concerns

Recommended Vendor Actions

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