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Verizon’s Embrace of LTE
By Mark Evans | November 30, 2007
Verizon Wireless’ decision to use long-term evolution technology could make life, well, interesting for Nortel.
LTE is technology supported by the GSM community - a market where Nortel has a minor presence. At first blush, this suggests that Verizon’s decision could be bad news for Nortel.
The silver lining, however, is CDMA (the technology used within Verizon’s network) and LTE can play nice together. This means Nortel, which signed a five-year, $2-billion agreement to provide Verizon with CDMA equipment a year ago, could actually benefit from Verizon’s embrace of LTE.
Scott Wickware, Nortel’s VP of marketing and mtrategy for carrier networks, Nortel, told TMCnet that “Nortel is looking forward to helping Verizon Wireless enhance its current CDMA network, which already offers innovative mobile multimedia services, and explore a seamless evolution path to 4G LTE and true mobile broadband for their subscribers.”
For more, check out CNet’s Crave blog.
Technorati Tags: Verizon, LTE, Wireless
Topics: Technology, Wireless |
November 30th, 2007 at 1:56 pm
A quick review of Verizon’s Wireless business shows that they have 63.7 Million subscribers generating $38 Million in revenues which drives an ARPU of a little more than $59. At a basic business level, I highly doubt that Verizon would compromise a business that represents 46% of revenues and 72% on income.
How long do you think it would take to migrate 63.7 Million users to a new technology that will demand replacement of their current mobile device? Personally, I think that alone will take many years with full migration not likely until 2012 or longer.
What we also don’t know is the operating spectrum of LTE, how much of this spectrum Verizon owns and how it compares to their current CDMA spectrum. If Nortel or others can create an LTE solution that coexists and re-uses common and existing CDMA equipment, then they have the opportunity to gain a leadership position. It’s too early to really know this since I don’t believe LTE has reached formal industry standardization.
This will also drive increased demand for backhaul bandwidth. We shouldn’t forget that Nortel recently won a deal with Verizon for 40 Gbps Optical backhaul. Another opportunity for Nortel in this Verizon strategy.
November 30th, 2007 at 4:08 pm
Note that Nortel is also placing big bets and investment into LTE. While the spec is being defined by 3GPP, the radio interface has little in common with GSM and UMTS, it’s much closer to WiMax (i.e OFDM, MIMO/ATS based).
December 1st, 2007 at 10:00 am
Although it makes sense for Verizon to go with LTE, it is bad news for Nortel. With Qcom UMB, Nortel had to compete with Alcalent, Moto, Samsung, and the Chinese. Now, with LTE, Nortel has to compete with Alcalent, Moto, Samsung, Nokia, Ericsson, and the Chinese. More competition = less $$.
December 2nd, 2007 at 2:38 am
As I understand it, LTE is a competetive technology to WiMax. Nortel is strongly committed to WiMax, although it is apparently also involved with LTE. Does the strong marketplace interest in LTE mean a lessening interest in WiMax. If so, Nortel may have put its money on the wrong horse in the race.
December 3rd, 2007 at 2:48 am
Nortel publicly demonstrated the first complete LTE air interface implementation at the 3G World Congress in February 2007 including OFDM-MIMO, SC-FDMA and multi-user MIMO uplink.
Here’s the press release: http://www2.nortel.com/go/news_detail.jsp?cat_id=-8055&oid=100214455
December 3rd, 2007 at 2:53 am
Nortel publicly demonstrated the first complete LTE air interface implementation at the 3G World Congress in February 2007 including OFDM-MIMO, SC-FDMA and multi-user MIMO uplink. Here’s the press release:
http://www2.nortel.com/go/news_detail.jsp?cat_id=-8055&oid=100214455
December 3rd, 2007 at 11:25 am
It looks to me like at&t is deploying LTE as well. (I suspect that WiMax will ultimately be folded into LTE, but that is another topic) http://www.engadget.com/2007/11/26/the-engadget-interview-ralph-de-la-vega-ceo-of-atandt-mobility/ As evidenced by the immature and off topic comments below the article, I also think that at&t’s De la Vega is grossly underestimated. I suspect we will be hearing a lot from him as soon as the spectrum auction quiet period is over.
I think this is a somewhat bad thing for nortel, given the LTE statement by Richard Lowe, president of carrier networks:
http://blogs.nortel.com/ctoblog/2007/08/16/nortels-4g-strategy/ “…Bottom line to customers is that there is no true evolution from UMTS to LTE. In both cases, it requires new handsets and new hardware to deliver on the capability of 4G.”
I challenged him on the “no true evolution path” statement, but he apparently stands by that statement, which IMO is a sure turn off for customers.
December 3rd, 2007 at 3:12 pm
jayemmay,
The competition between WiMax and LTE is more on the commercial side than on the technology. While the two technologies are not directly compatible with one another, they are very similar and much of the investment that Nortel is making in WiMax is designed to translate directly into LTE.
Think of it more like the differences between DVD-R and DVD+R