Cloud services, IP drive new wireline opportunities, says Alcatel-Lucent's Vrij

DALLAS--While AT&T's (NYSE: T) move to acquire T-Mobile and the ongoing drive to LTE in the wireless industry is the talk of the town in the telecom industry, there's just as much opportunity for service providers to amplify their wireline offerings.

Robert Vrij

"...we are also seeing growth not only (in wireless), but if you're a fixed, mobile or a converged operator, we see plenty of opportunities there." - Robert Vrig, EVP & President Americas Region, Alcatel-Lucent (Photo courtesy of TIA)

Speaking during the first day of the TIA Inside the Network event, Robert Vrij, Executive VP, President of Americas Region, Alcatel-Lucent (NYSE: ALU) put forth a plan that can help not only wireless-only players, but also wireless/wireline or wireline-centric providers.

"Everyone in the industry wants to talk about the wireless explosion, which is driven by video, tablets and smartphone penetration," he said. "As a global company we are here to say we are also seeing growth not only there, but if you're a fixed, mobile or a converged operator, we see plenty of opportunities there."

With wireless growth as a backdrop, Alcatel-Lucent, which saw some upticks in its submarine cabling and IP businesses in Q1, is creating new wireless backhaul opportunities for wireline operators that can provide necessary wholesale services.

"It's not black and white because the lines are blurring," Vrij said. "One example of that trend is wireless backhaul where clearly the traffic on that wired network for a large portion may have originated on the wireless network."

This is why Alcatel-Lucent takes a more holistic approach that takes into account growth opportunities in both wireless and wireline. Today, Alcatel-Lucent spends over a billion euros a year of the wireline portion of its portfolio.

Of course, challenges for the wireline and wireless networks remain, however, especially with the transition from TDM to IP. While the transition from the TDM to IP network has provided service providers more flexibility, the process has seen some unique challenges.

A key challenge, explained Vrij, is that today's telecom network has to be always on and that service providers need to find a way to reallocate access capacity for the non-peak time to a time where they see congestion.    

One way service providers are resolving the capacity allocation issue is through the advent of cloud service model.

"Every service provider we're talking to on a global basis sees there's going to be a lot of cloud opportunity relative to the evolution of their network," Vrij said. "It is a perfect storm that's happening right now as we're seeing the cloud development in real time and the business models that are making that feasible."

While the idea of the cloud has been around for a long time, Vrij believes that service providers have a better chance at providing more effective cloud services today because they can now manage an application from the cloud to the end-user.

In addition to providing a greater end-user experience, the cloud will also provide benefits to the CIO that's trying to manage the bevy of devices their company's employees are using to communicate on their respective enterprise networks.

"A secondary benefit is if you look at today's CIOs in managing the complexity of the workforce that's bringing a vast amount of new devices onto the network to be managed," Vrij said.

As Vrij sees it the cloud service drives solves three problems: it moves the business models from a capex sensitive environment to an opex sensitive environment; it supports proliferation of devices that would have been overwhelming to support on the client side; and it supports the further evolution from the TDM to IP and then to virtualized environment.

With these elements of the cloud in place, service providers can not only leverage existing resources to deliver more services, but also the ability to provide new revenue generating services such as virtual desktop services and low latency gaming.   

"We believe that from a company point of view cloud is here to stay, but the forecast for cloud is certainly going to be cloudy for some time."

For more:
- here's a link to the TIA event page

Special Report: TIA 2011 Preview: Wireline's rising trends

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