Alcatel-Lucent to Revamp Metro Network - Analyst Blog

Leading telecom provider Alcatel-Lucent (ALU) recently launched the Metro Cell Express Site Certification Program, an initiative to address the challenges related to the acquisition of sites and proper deployment of metro cells.

This initiative is in line with the company's ‘The Shift Plan' that was formulated to transform it from being a telecom generalist to a specialist in IP networking and Ulltra-Broadband services. It is designed to boost the company's small cell portfolio, while enabling the company to be a leader in deploying metro networks across the globe.

Alcatel-Lucent believes the growing mobile network demand can be perfectively handled by enhancing the small and metro cells of the network. The exponential growth in the use of smartphones and similar devices is driving the demand for high speed data. The backhauls – the connecting links between the major and minor networks for deploying metro cells – are needed to be secured for optimum capacity of the network.

Alcatel-Lucent's certified members will assist mobile operators in efficient installation of metro cells by applying their strategic expertise in acquiring real estate, managing assets and increasing the capacity of the network. The members will initially consist of cable operators (MSOs), systems integrators, managed services providers, and site acquisition specialty firms along with OSP Construction Specialists.

A recent study named ‘Metro Network Traffic Growth: An Architecture Impact Study' from Alcatel-Lucent's Bell Labs predicted that the growing demand for video and the rapid increase in data centers are likely to increase data traffic in metropolitan cities by as much as 560% in the next 4 years. By 2017, video traffic is expected to surge 720% while cloud and data-center traffic is likely to increase by 440%.

The study also suggested that the traffic in the whole network will grow two times faster than the backbone network. It also revealed that data traffic in metro networks is expected to increase to 75%, up from the 57% at present. Thus, by 2017, only 25% of the total traffic will be handled by the backbone network. This makes the deployment of small and metro cells even more crucial for keeping up with the growth and filling the lacuna.

Alcatel-Lucent currently has a Zacks Rank #3 (Hold). Other stocks in the industry which look promising at the moment include EXFO Inc. (EXFO), ClearOne, Inc. (CLRO) and TESSCO Technologies Inc. (TESS). EXFO currently has a Zacks Rank #1 (Strong Buy), while ClearOne and TESSCO both carry a Zacks Rank #2 (Buy).