Alcatel-Lucent (ALU) and China Mobile have announced a one-year agreement valued at up to $1.03 billion (750 million Euros) to move the world’s largest mobile operator to an all-IP, “ultra-broadband” network with an eye towards cloud services and network functions virtualization (NFV).
China Mobile had already selected ALU in 2013 as one of the vendors for its new LTE network, providing its lightRadio TD-LTE overlay, lightRadio Metro Radio Outdoor small cells and Evolved Packet Core. ALU is China Mobile’s primary EPC vendor. The two companies also showcased NFV in the form of virtualized EPC, IMS and RAN for mobile operators at Mobile World Congress this year.
“This is a significant achievement of Alcatel-Lucent and essentially makes us a key technology provider in virtually every aspect of China Mobile’s growing mobile ultra-broadband network,” said Michael Combes, CEO of Alcatel-Lucent, in a statement. “We have worked side-by-side with China Mobile throughout many developments in mobile technology, including the development of 4G TD-LTE. We are continuing that close collaboration as China Mobile moves to the next level of ultra-broadband through NFV supporting future cloud applications and services.
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The timing of the contract win is no coincidence, either, as Chinese president Xi Jimping is visiting France to mark the 50th anniversary of French-Chinese diplomatic relations, while ALU is noting the 30th anniversary of Alcatel-Lucent Shanghai Bell as a Chinese telecom player.
Alcatel-Lucent’s stock was up almost 4% in mid-morning trading in response to the news.