Third-generation contracts seem to be giving Nortel Networks Ltd. an edge lately, owing to what industry observers describe as the Brampton, Ontario-based vendor’s Internet Protocol advantage. Nortel’s complete solution has helped it in its contracts of late with both Verizon Wireless and AT&T Wireless Services Inc. Sources say AWS will give the bulk of its Wideband CDMA core network contracts to Nortel, while Nokia Corp. and L.M. Ericsson will get most of the carrier’s radio-access network deals.
But Cisco Systems Inc. claims to be up there with the Canadian company in the quest for getting IP contracts.
Nothing has demonstrated the concerns about Nortel’s position more than the recent actions of Nokia Corp. and Alcatel Alsthom. Nokia acquired more than a dozen engineers from Tahoe Networks, including some of the company’s chief technology strategists. Earlier, Nokia bought Amber Inc. in its search for a viable solution.
Recently, Alcatel acquired Watercove Networks, cementing a relationship both companies have had for close to a year.
The prime interest in data among the major vendors is at the center of this drive to upgrade networks, specifically the IP transport area and the intelligent edge, which involves the GGSN (GPRS gateway support nodes) and PDSN (CDMA packet data service node), the boundary between the radio and IP-backbone as well as the media gateway.
Other major players like Lucent Technologies Inc., Motorola Inc., Nokia, Siemens AG and Ericsson continue to boast a wide array of contracts around the world. Still attention has been turning more toward Nortel in the past couple of years.
There are two reasons for Nortel’s position, explained Phil Marshal, senior analyst with the Yankee Group. “The first is significant presence in wireline business,” he said. “The second point is that they traverse competencies, covering both GSM and CDMA technologies.”
Cisco also has a strong showing. Marshall said. The networking company believes it has a better solution than Nortel. Larry Lang, general manager of Cisco’s wireless group, said that Nortel’s Shasta product cannot match Cisco’s.
Nortel acquired Shasta in 1999, and the product was the brainchild of the top founding engineering staff of Tahoe Networks, who now work for Nokia.
Nortel has used vertical integration to its advantage, having its entire offering under one roof. Cisco provides the IP core for such companies as Lucent and Motorola, which is one reason Cisco has been ramping up its share in the market.
Nortel’s solution makes it easy to sell to carriers in one package, Marshall said.
Cisco’s Lang disagrees. He said with data maturing in the industry, carriers would look to companies that are specialized, such as is happening in the computer world. He said Cisco’s advantage over Nortel is underpinned in the bid for an upcoming contract with Sprint PCS for its data network. He noted Nortel is not anywhere near the top of the short list, while Cisco has a good chance of snagging the deal. The other companies on the list are mainly startups.
Lucent is focusing its efforts on CDMA technology, Marshall said. While Ericsson offers both protocols, it uses Juniper Networks’ technology for its IP core offerings.
Apart from providing the core to major players like Motorola and Lucent, Cisco also has won direct contracts, Lang said, including 19 of 21 bids in Europe in the past two years.
The increasing premium on data and, therefore, IP took some of the major companies by surprise as they placed more emphasis on their radio-access networks and their mobile switching centers.
Even Motorola thought it could succeed with its radio-access networks, but it fell behind in contracts. It acquired Winphoria to bring a full complement of its mobile network infrastructure offering. Yet, it does not have the IP core, so it depends on Cisco to provide that.
Although Alcatel and Nokia look to having their own products under one roof, Cisco said they have been its resellers as well.
Marshall said Cisco’s plan to rev up its core network deal cannot be discounted because it has “a lot of money.”
