CTIA Wireless 2009

ALU Finally Releases an EPC Story – And It’s a Good One

| Apr 3, 2009 | Wireless Infrastructure | Show Update

| Analyst: Peter Jarich

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

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Event Summary

April 1, 2009 - Alcatel-Lucent introduced its Evolved Packet Core (EPC) portfolio. In particular, the company introduced Serving Gateway and Packet Data Network gateway products based on its 7750 Service Router along with Mobility Management Entity and Policy and Charging Rules Function products based on ATCA. Beyond EPC functionality, ALU positioned the new solutions as part of its META mobile network transport strategy.

Analytical Summary

• Current Perspective: Positive on Alcatel-Lucent’s Evolved Packet Core (EPC) launch. Given the company’s IP assets and its LTE core win at Verizon, the launch was largely expected. Surprising or not, however, there’s no shortage of reasons to like the move; it leverages the company’s successful service routing kit; it smartly uses routing assets were needed (S-GW and P-GW) and ATCA expertise where it makes sense (MME and PCRF); it extends the company’s META message, telegraphing a plan for the integration of gateway functionality directly into the transport layer. Like it or not, however, competitors can claim a strong track record and momentum in the 3GPP packet core, lending more credibility in the EPC space as well.

• Vendor Importance: Very high to Alcatel-Lucent because any company trying to sell a complete LTE solution will need a solid base station and EPC story. This is no different for ALU particularly with an EPC win at Verizon meaning that the company now needs to execute on its EPC promises. Perhaps more importantly, a credible EPC solution is critical for Alcatel-Lucent given its well-known service routing assets and fixed-line expertise – not to mention its hopes at building the success in LTE that it hasn’t managed in WCDMA.

• Market Impact: High on the wireless infrastructure and LTE markets since Alcatel-Lucent’s EPC launch introduces yet another solid competitor into the space and bolsters the strength of ALU’s end-to-end LTE solution. Again, the launch will come as no surprise to competitors. Given the relative lackluster performance of its packet data gateway solutions in the past, however, a potentially strong router-based ALU EPC solution is remarkable while pointing to a split in the EPC market between vendors with purpose built kit and those leveraging proven routers to tell a story combining future transport integrations.

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