Is Verizon Wireless' LTE vendor decision the death knell for certain companies in the infrastructure community? This week the operator announced Alcatel-Lucent and Ericsson will build the company's LTE network that will light up commercially in 2010. The award was a blow to bankrupt Nortel, which recently abandoned its WiMAX business to focus solely on LTE as the future. Chinese vendor Huawei failed to secure a stronger foothold in the U.S. market, while Motorola, which has been pitching a strong LTE story given its leadership in WiMAX, also lost out.
These billion-dollar awards now position Alcatel-Lucent and Ericsson as leaders in the LTE space. With Verizon positioned as a first-move in the LTE market, what other near-term opportunities are there for vendors to fight over? China Mobile has an aggressive LTE rollout plan for 2010 as well, although it needs a vendor with TDD LTE expertise. And NTT DoCoMo also has streamlined plans. AT&T, while not rolling out LTE until 2011 is already in an RFP process to choose vendors for LTE. Nortel, of course, is responding to that RFP. It has to be fighting tooth and nail to win a big contract from AT&T. To be shut out of the U.S. LTE market altogether would spell disaster for the vendor, which already is a big supplier for both Verizon and AT&T on the 3G side.
Moreover, big contracts with European operators appear to be some three years away. According to the Financial Times, Vodafone, France Telecom and Deutsche Telekom plan to delay spending billions on contracts in part because they want to reassure their investors they won't spend like crazy during tough economic times. Of course, many of those operators don't have the spectrum to deploy LTE yet. Can those vendors who lose out in the U.S. afford to wait for the rest of the world to catch up with LTE contracts?
The bottom line may very well be that Verizon and AT&T will significantly alter the landscape of the infrastructure community.--Lynnette