Research 2.0

Wednesday, October 11, 2006

Alcatel talks video, WiMAX steam powering ALVR?

During the current broadband networking conference being held in Paris, we had a few moments to pop into hear Mike Quigley, President and COO of Alcatel (ALA), talk about their current plans around wireline networking. We also were able to soak up some general observations from walking the floor and talking to vendors.

Not surprisingly, Alcatel is focused on the growth of broadband subscribers and the need for their customers to find ways to reduce churn and operating expenses with new services and infrastructure.

There were a few interesting highlights from an annual customer survey which indicated that 9 of the top 10 opportunities are in personalization, rather than accessibility or interactivity. Although few details were shared, it was clear that quite a few had to do with video. In fact, Quigley did say that it appeared that customers were making their initial provider choice on the basis of video and then making decisions regarding other services like VoIP. No doubt based at least in part on these results the key aspects of future platforms include being optimized for video services.

More broadly it was clear from the myriad vendor presentations that every single one of them was spending a great deal to drive their own flavor of triple-play solutions into the market with improved performance and lower pricing. One thing for sure is that software and services companies like Google can rest assured that the broadband network will be in place to support the kind of software as a service architecture core to their approach.

Motorola (MOT) was mildly surprising for us although we admit to being easier to impress in networking than software. The company was showing a very impressive fiber networking platform that Verizon (VZ) has chosen to deploy as their solution. We don't normally think much of Motorola in this space but it appears that they have a pretty compelling offering here.

One of the benefits of the system they showed includes the ability to support a 20km+ distance to the end node delivering 2.4GB/sec (1.2GB upstream). Not yet single wavelengths of light into the home but pretty good from a practical standpoint.

There was also far more WiMAX deployment activity than we would have guessed, especially in Europe which seems to be a little 3G focused. Apparently WiMAX will have a major role here with some large players like France Telcom who owns the fixed market and has purchased the WiMAX spectrum to compete more effectively with the cellular providers.

A small public company, Alvarion (ALVR), has an pretty good portfolio of WiMAX technology products and early deployments. They company has a good deal of legacy non-WiMAX business, but if the excitement continues to build around WiMAX being a simpler alternative to the seven radios in every phone the Qualcomm guys power, talk about the stock will continue to do well and stand a good chance to be bought out by one of the larger networking players.