According to a press release issued today on Alvarion’s web site, Nokia Siemens Networks (NSN) will resell Alvarion’s latest mobile WiMAX/ IEEE 802.16e gear to its current and prospective WiMAX customers. The Alvarion equipment to be resold includes the BreezeMAX Base Stations, ASN Gateways and 4Motion Element Management System. NSN will provide deployment, management and maintenance services for the products and will leverage its proven multi-vendor capabilities for a most efficient and smooth solution.
"We are pleased to expand our long standing relationship with Nokia Siemens Networks," said Tzvika Friedman, president and CEO of Alvarion. "For certain operator customers, we believe this collaboration will deliver a strong business case through the most advanced, best-in-class WiMAX network solution that leverages Nokia Siemens Networks’ solid experience in local market execution and support capabilities — key elements that fit well within our Open WiMAX strategy."
Alvarion continues to win new WiMAX business all over the world. For specifics, please visit: http://alvarion.com/presscenter/pressreleases/
. Alvarion is considered to be a stable company that offers transparency through it’s public listing on the Tel Aviv and NASDAQ stock exchanges. Alvarion was burned by the deal with now bankrupt Nortel, which caused earnings to take a hit. The partnership with NSN should help them sell more equipment through a new “value added” sales channel. Nokia Siemens Networks has a significant professional services division and OSS capabilities that can support network planning, integration, and management (more on this below).
Comment and Analysis: A Shift in Strategic Direction for NSN
There have been other WiMAX original equipment manufacturing (OEM) deals that involved collaboration and joint investment -Fujitsu partnered with Airspan and Nortel Networks also resold Alvarion’s gear (until they went bankrupt). But this agreement does not involve any joint development or investment. Why not?
Probably because NSN views the overall WiMAX market as being much smaller then it envisioned just a couple of years ago. More importantly, they evidently see much better potential in being a “managed equipment and operations” or OSS provider. We think that NSN wants to concentrate on management and maintenance of network equipment in order to score more network outsourcing deals like the one they cut with Embarq last summer (NSN is managing Embarq’s U.S. network operations centers). We’re sure that Sprint’s multi-billion outsourcing deal to Ericsson caught the attention of senior NSN executives.
Meanwhile the WiMAX network equipment market has turned out to be very competitive and smaller than anticipated. Low cost Chinese vendors like Huawei and ZTE are driving prices down. So the profit margins on hardware are just not there. But OSS and network management are another story. NSN will maintain its WiMAX services business by supplying consulting, systems integration and network management for any operator that needs help.
“While we’re no longer developing an in-house product for WiMAX, mobile WiMAX is still a part of our portfolio, and we continue to work with customers interested in WiMAX through a partner or reseller approach, using products from third parties and then offering our suite of services capabilities,” an NSN spokesperson wrote in an e-mail.
What Can NSN’s Existing WiMAX SP Customers Expect?
The Nokia Siemens Networks web site states: “Our track record already comprises 18 WiMAX references in 14 countries.” It also talks quite a bit about end –to-end solutions, which will no longer be pursued: “Our WiMAX E2E solution can be a key factor in assuring your users a true quality of experience and reducing your costs. Nokia Siemens Networks now unlocks the true potential of broadband with this end-to-end solution for the deployment and operation of WiMAX networks.WiMAX delivers a unified stream of voice, data, and video, meaning that you can offer a better service at a lower cost while improving customer satisfaction. Each WiMAX base station enables operators to provide cost-effective broadband wireless access for hundreds of users and, of course, both mobile and fixed services can be provided by deploying networks based on WiMAX.”
In our opinion, the challenge for NSN
will be to integrate Alvarion’s Mobile WiMAX gear with that of their own in the 18 WiMAX networks they reference. Note that IEEE 802.16 does NOT specify WiMAX end-to-end anything- it is only a RAN interface from Base Station to Subscriber Station. So interoperability is not at all assured. Yes, we know about WiMAX Forum end- to- end specifications, but they are not standards nor are they even in the public domain. Look at the controversy regarding Profile C- a WiMAX Forum
spec on the interface (R6) between the BTS and the ASN Gateway.
Perhaps NSN will be such a good systems integrator that existing WiMAX SP customers will feel no pain. We certainly hope so.
NSN is Still Very Bullish on the Mobile Internet- Focus is on 3G and LTE
According to a press release issued today on the company’s web site,
Nokia Siemens Networks has just notched up its 500 millionth mobile data user
“With an increasing number of subscribers logging on to the Internet to access and download data on mobile devices, mobile data traffic growth is doubling every year. In fact, Nokia Siemens Networks expects that at current rates, by 2011, mobile data will overtake voice traffic*, growing exponentially until 2013. Keeping pace with this rapid growth is Nokia Siemens Networks- the company has reached the 500 million mobile data user milestone, accounting for roughly 40% of global mobile data traffic today.”
Curiously, there is no mention of Mobile WiMAX in the press release. Instead, NSN’s range of packet core network solutions is highlighted. The packet core technology is said to allow operators to handle a huge number of mobile consumers, even if they are using data services heavily, with a very small amount of network equipment. The “Direct Tunnel innovation” is said to “provide operators with a simpler “flat” connectivity architecture, makes scaling with growing traffic much easier and more importantly, commercially viable.”
So it looks like this is where NSN sees its future growth in wireless infrastructure equipment. It’s in 3G-HSPA+ and LTE packet core network equipment. It was not likely a coincidence that this press release was posted on the same day the Alvarion reseller agreement was announced.