Alcatel pins hopes on China 4G

Alcatel Lucent SA's CEO says the company's selection by China Mobile Ltd as a primary supplier for the Chinese telecom operator's rollout of the world's largest high-speed wireless technology system "proves we are fulfilling the needs and requirements of Chinese telecommunications companies".

"We are proud to be part of the development of the telecommunications industry in China," Michel Combes told China Daily on the sidelines of the company's 2013 technology symposium.

Under the contract, announced during the conference in Basking Ridge, New Jersey, about 35 miles west of New York, Paris-based Alcatel-Lucent will supply Evolved Packet Core, or EPC, a framework for providing voice and data services in China Mobile's 4G long term evolution (LTE) network. Terms were not disclosed.

4G LTE is the standard for wireless communication of high-speed data for mobile phones and data terminals. Fourth-generation wireless networks achieve data download speeds of up to 80 megabits per second, four times faster than 3G networks.

The contract announcement - which will give Alcatel-Lucent a dominant 24 percent share of the Chinese telecom operator's 4G LTE network - came as Combes fleshed out a restructuring plan aimed at ending continuing losses at the company, created by Alcatel's 2006 acquisition of former AT&T Inc equipment arm Lucent Technologies.

In what he has dubbed the "Shift Plan", Combes has said he will slash 10,000 jobs globally and sell assets, while reorienting Alcatel-Lucent toward several businesses, such as cloud computing, broadband wireless networks and Internet protocol routing.

"We are all at a turning point in the industry", Combes told an audience of analysts and media at the symposium, held near Lucent's former headquarters in New Providence, New Jersey. It was there that the company's legendary R&D facility, Bell Laboratories, gave the world innovative technologies such as the laser, the transistor, and touch-tone telephone dialing. "What was working five years ago for service providers doesn't work anymore," the CEO said.

Through its ventures with China Mobile, the largest telecom operator in China with more than 750 million, or more than 60 percent, of the country's mobile subscribers, Alcatel-Lucent has played a major role in China's deployment of 4G wireless networks. As the nation moves closer to starting commercial service based on the technology, the number of applicants for 4G services is expected to surpass 100,000 in major cities, a China Mobile official told China Daily last month.

Combes said in the interview that China's leadership - which has said it is "preparing for the release of 4G licences" - has shown "a clear willingness to attract broadband services". Alcatel-Lucent is a major supplier to most of the nation's service providers, supporting such strategic industries as transportation and energy.

Rising demand in China for high-speed mobile services reflects a "clear understanding that there is direct link between investment in telecommunications and GDP growth", Combes said.

"China is keen to structure its own telecommunications industry as it reorganizes telecom as a 'sovereign industry'", he said. That's "not only because of growth in China, but because it gives it the ability to build an industry which allows it to export on a worldwide basis."

A growing appetite for services such as instant messaging also is driving demand, the CEO said.

"When you mix in the change in behavior of customers and also the (influence of) youths who run to this type of technology, that unlocks huge growth," Combes said. "On top of that you have a strong governmental commitment on the speed at which it has to be rolled out. You have all these ingredients to make it work".

China's size poses the biggest challenge in bringing high speed digital services to the country, Combes said.

At the end of the day, "China Mobile, like any customer, is looking for the best, the most talented company for them," Combes said.

michaelbarris@chinadailyusa.com