CTIA Wireless 2009

Alcatel-Lucent Gives LTE to CDMA – Like Any Good Leader Should

| Apr 2, 2009 | Wireless Infrastructure | Show Update

| Analyst: Peter Jarich

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

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Event Summary

March 31, 2009 – Alcatel-Lucent announced a new base station supporting CDMA and LTE services and a strategy for upgrading existing CDMA base stations to support LTE. In particular, the 9238 Base Station Macro leverages software defined radio (SDR) technologies integrated into ALU power amplifiers to enable the use of CDMA and LTE baseband (across multiple frequencies and multiple bands). The same SDR technologies, available in existing ALU base stations, allow them to support LTE as well.

Analytical Summary

• Current Perspective: Positive on Alcatel-Lucent’s new CDMA-LTE base station – the 9238 Base Station Macro – and announcement of a “Converged RAN” strategy to support LTE in existing CDMA2000 RAN assets. As ALU’s sizeable base of CDMA customers looks to launch LTE services, the ability to leverage already deployed assets is clearly attractive, and the existence of a new base station supporting both technologies provides a path for greenfield or renewal demands. Unfortunately, like too many other LTE announcements, the vendor fails to highlight its other LTE assets – a mistake in any market where operators need complete solutions.

• Vendor Importance: Very high to Alcatel-Lucent, because it maintains the market’s leading position for CDMA market share. Chinese vendors may claim a greater share of new CDMA deals, but Alcatel-Lucent’s share of the global CDMA market is well understood. As these vendors look evolve their networks to support LTE, ALU needed to provide a solution which combined its LTE and CDMA2000 assets – borrowing from existing CDMA assets as much as possible in order to preserve training and stocking efficiencies. Of course, the fact that competitors including Huawei, Motorola and ZTE have all conveyed their own multi-standard RAN strategies for CDMA operators only makes the move more important.

• Market Impact: Moderate on the wireless infrastructure market, because the move was largely expected. To be sure, a new CDMA-LTE RAN offer and strategy for moving existing RAN assets to LTE make Alcatel-Lucent a stronger LTE competitor. That said, the company’s wide base of CDMA customers and the market’s general acceptance of LTE as a 4G migration path virtually ensured that it would develop – and communicate – a strategy for taking these customers (as well as potential new ones) to LTE.

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