Alcatel-Lucent gears up for Kiwi broadband push

Alcatel-Lucent is at the centre of New Zealand’s network building efforts, delivering gear and expertise to Telecom for its massive projects, to Transpower and to state-owned enterprise Kordia among others.

With over 800 full-time staff in the country — and growing — the appointment of a local CEO is, perhaps, overdue. The fact that the position has been filled by someone familiar with New Zealand is a bonus.

Steve Lowe took the job after eight years in the Asia-Pacific region, most of that with AT&T. He returned to New Zealand in 2007 and won the CEO gig earlier this year.

He says the appointment is about strengthening executive-level representation in New Zealand and empowering the local business. He has oversight over business growth and customer relationships and, as the only local director, other delegations and decision-making power “within an envelope”, he says.

That includes autonomy over new initiatives and products, he says.

Lowe also heads a company that spent most of last year bedding down the merger between Alcatel and Lucent, which was finalised in late 2006.

Alcatel-Lucent’s relationship with Telecom is long-standing. It works for the company across the board, building mobile and fixed-line networks, including the company’s new $400 million 3G mobile network.

This month, Telecom announced a further contract with Alcatel-Lucent for a $130 million nationwide IP network to bring voice, internet and mobile telephony on to a single, integrated platform. The contract runs through to December 2009. The development is a component of Telecom’s operational separation undertakings.

Less well-known is the work the company is undertaking for Transpower. In 2007, Lowe’s company began a five-year contract which will see it design, build and operate an all-IP network to connect 192 sites, including power stations and substations.

The network will replace an existing SCADA (supervisory control and data acquisition) network, but goes beyond sensors to deliver improved management and control, Lowe says.

He says the arrival of a new executive team at Telecom in the middle of the broadband debate makes it “an interesting time”.

Given that level of activity it should be no surprise that Alcatel-Lucent has hired over 200 new staff this year. Lowe adds that there are no signs of a slowdown in network investment ahead of the election, despite the uncertainty of two quite different and competing broadband strategies from the major political parties.

“We’re encouraged by both of the announcements,” he says. “They are similar in intent and initiative.”

Both offer opportunities for the private sector to bid for a share of funds, he says, and the regulatory environment has established some “hard and fast” deadlines.

However, the access network is only one part of the user experience, Lowe says. We need capacity nationally and internationally as well. He is encouraged by investment in the Southern Cross Cable.

Lowe says the arrival of new competitors to Alcatel-Lucent, such as China’s Huawei, is more noticeable offshore than locally. Ericsson features as a competitor in the mobile segment.

“Typically we are number one in wireline, one or two for IP networking and two or three for wireless,” he says. Outsourcing and managed services are growing rapidly, he says.

Alcatel-Lucent outlines fibre options

Alcatel-Lucent has its own position on the debate between fibre to the home and to the node: calling its approach “fibre to the most economic point”. That strategy was presented to the recent Tel.Con 9 conference, in Auckland, by Alcatel-Lucent’s VP of solutions and strategy Ric Clark.

Clark notes there are still opportunities for improvements in the performance of the copper network. However, both copper and wireless broadband are constrained. In the medium- to long-term fibre is the answer. Fibre-to-the-node can be completed quickly and will enable the delivery of “triple play” services, for the delivery of voice, internet and IPTV, to bolster carrier income as traditional voice revenue declines. After that, fibre can be deployed to the home as it gets cheaper.

Clark makes the point that cabinets and ducts, built for unbundling and VDSL delivery, can be reused for fibre. In addition, exchanges can be consolidated and costs saved. But, in the end, to extend fibre deployment beyond the economic point, where payback periods are longer, requires a policy-driven approach from government.