Nortel and Alvarion have agreed to jointly create an end-to-end Wimax solution which combines Alvarion's mobile Wimax radio products with Nortel's core network solutions, backhaul solutions, applications and professional services.
This announcement finally puts an end to the in-house mobile Wimax radio access developments at Nortel. Nortel will now rely exclusively on Alvarion's BreezeMAX equipment solutions for the mobile Wimax radio part. However, this is not a traditional OEM, in the sense that Nortel will contribute to enhancing the solutions by bringing its recognised expertise in cellular technologies and the experience gained in its own Wimax development.
Nevertheless, overall this move is an acknowledgement by Nortel that it could not achieve the goal of being a leading mobile Wimax supplier on a standalone basis. In the past, the vendor had officially stated several times that Wimax access infrastructure (as part of its 4G strategy) was expected to be a key growth pillar for the company. Unfortunately, the vendor has so far failed to be selected by a tier 1 operator (including Sprint, which is one of its key CDMA customers) and has only been able to attract a dozen small operators.
Nortel's 4G strategy initially encompassed UMB, 16e and LTE. UMB has limited market potential, as several significant CDMA operators have announced plans to adopt LTE instead.
Being a significant CDMA supplier, Nortel is in a good position to address this specific market opportunity but it needs to move fast as operators like Verizon are likely to be among the first movers.
Partnering with Alvarion for mobile Wimax will allow Nortel to re-allocate resources and focus its wireless development efforts mainly on LTE. In our view, this is of critical importance.
Given that Nortel exited the UMTS/HSPA market, which is the "natural'" LTE market opportunity, the vendor can't afford to miss early opportunities on the CDMA side.
Being selected for LTE trials at Verizon is obviously a good starting point, but being among the final suppliers of commercial LTE systems will be essential for Nortel's ambitions in LTE. As a consequence, in this challenging situation for Nortel, benefiting from additional resources cannot be a bad thing.
On Alvarion's side, this collaboration is testimony to the Israeli vendor's mobile Wimax expertise and marks the first significant reseller win for its mobile Wimax gear.
Until now, Alvarion only had OEM partnerships with big vendors for its fixed Wimax solutions because these companies decided to develop their own solutions for 16e.
The relationship with Nortel will reinforce Alvarion's capability and credibility to deliver and support larger-scale deployments globally thanks to Nortel's professional service activities and experience in wireless.