Alcatel, Telenor Ink 4G LTE Agreement - Analyst Blog

According to a global frame agreement signed between Alcatel Lucent ALU and Telenor Group, the former will provide 4G LTE network to Telenor subsidiaries in Europe and Asia. Per the deal, Telenor subsidiaries can offer Alcatel Lucent's 4G LTE overlay solution as an alternative to single RAN deployment. The financial details pertaining to the contract were kept under wraps. The scope of the agreement also includes Alcatel-Lucent's 4G LTE Radio Access Network and the 5620 Service Aware Manager.

Given the rising demand for high capacity and efficient mobile networks driven by the unprecedented increase in smartphone and tablet usage, LTE is poised to become a booming investment area going ahead, Thus, the decision to rollout the 4G overlay solution across its European and Asian subsidiaries is a strategic move by Telenor

Further, the economical 4G LTE overlay solution offers enhanced speed which will support Telenor's aggressive 4G deployment without the need for time-consuming equipment upgrades.

Telenor and Alcatel Lucent have a long standing relationship. Prior to this agreement, both the mobile telecom giants signed a three-year agreement in June 2013, according to which Alcatel provided high-speed Internet services to Telenor's 2G, 3G and 4G customers across Europe and Asia. This apart, Alcatel has entered into a number of new ventures in the recent past. Alcatel also cut a deal with Telenor India to provide and manage transformation services to Telenor Group's subsidiary, Telewings Communications Private Limited.

Alcatel Lucent has been very focused on its ‘Shift Plan' strategy, as per which the company has been making sincere efforts to reposition and establish itself as a specialist of Internet Protocol IP and Cloud networking, ultra broadband fixed and mobile access. The company has been successful in its plans and given the growth in IP and LTE technologies, it has won key deals, thereby gaining market share. Alcatel Lucent has been chosen by telecom giants such as Verizon Wireless to enhance its LTE network. 

The LTE services are included under Alcatel's Wireless division, which is part of the Access segment. The Access segment contributed approximately 50.4% of revenues in fiscal 2013. In the recently reported quarter, the Wireless division reported a 2.3% increase in revenues to €999 million ($1,369.1 million), primarily driven by strong LTE growth across major regions, especially in the U.S.

Alcatel currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Ubiquiti Networks Inc. UBNT, Polycom, Inc. PLCM and ShoreTel Inc. SHOR, all of which sport a Zacks Rank #1 (Strong Buy).

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