Inside Alcatel-Lucent's bid to keep its NBN contracts

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Inside Alcatel-Lucent's bid to keep its NBN contracts

Big guns brought in to lay out strategy to NBN Co.

Alcatel-Lucent has flown in its fixed networks president to meet with NBN Co officials this week in a bid to preserve as much of the up to $1.5 billion value of equipment contracts it holds for the national broadband network as possible.

Federico Guillén will also provide a keynote at today's NBN: Rebooted conference in Sydney, but he told iTnews he would be visiting one of Alcatel-Lucent's "bigger customers" — NBN Co — to lay out some options for Alcatel-Lucent to be retained as an equipment supplier to the project.

"What I want to tell them is, 'Look. In the last year, this is what we have advanced into, this is the type of solutions we have, they're ready if you want to use them, we are here to help," Guillén said on the sidelines of Alcatel-Lucent's 2013 Technology Symposium in New Jersey.

"It's their decision what they want to do."

Asked whether he believed the NBN could be rebooted in a way that preserved the value of Alcatel-Lucent's existing equipment contracts, Guillén replied: "It could be a [contract] version 2.0".

Guillén's pitch to NBN Co executives will take place several weeks before a planned visit to Australia by Alcatel-Lucent's CEO Michel Combes, which is also aimed at keeping the vendor on the lucrative project.

FTTx focus

Guillén appears to largely back the access technology-agnostic approach of the new government, although he said it's a view that Alcatel-Lucent has held for some time.

"What the operators have to concentrate on is the services they want to provide, not the technology they're offering," he said.

"In my opinion, if you commercialise a service as fibre, in reality you should commercialise a service as x Mbps, — with a certain quality of course — and then decide which technology you use".

His pitch is that an FTTx model — where 'x' is the most economical point up to which fibre can be drawn —is plausible, and can support speeds approaching 100Mbps regardless of what fixed-line technology forms the last mile connection to the home or business.

"The main message is we have solved the equation of providing fibre to the most economical point, and we are now able to provide the 100Mbps that everybody requires with both fibre and copper," he said.

"That relieves the pressure on operators to deploy always fibre. Sometimes it's not so easy to deploy fibre everywhere."


Alcatel-Lucent will present a model that relies on the VDSL2 vectoring micro-nodes it unveiled at Broadband World Forum last month.

The nodes — with capacities of either 1, 16, 48 or 192 VDSL2 nodes — can be installed at the edge of a house, in a basement, manhole or some other point in the street — wherever it proves most economical to stop rolling fibre to and switch to the existing copper, according to Guillén.

Vectoring is used to cut crosstalk — interference — in copper lines.

Guillén sees VDSL2 vectoring as a technology that is moving out of the lab and into production environments.

Though cognisant of the challenges, Alcatel-Lucent hopes NBN Co's environment will bring VDSL2 vectoring into production.

"Having that technology in a lab is relatively easy — we're engineers, so we can do everything — but making it work in a real operation with real copper that you have in the field that are sometimes 50 years old is not so easy," he said.

"We have analysed with certain customers all the different scenarios and the results have been promising".

From a pool of Alcatel-Lucent customers testing VDSL2 vectoring worldwide, Guillén said the number of "vector-ready lines" had grown from 1.3 million in the second quarter of this year to 2.4 million lines as at the end of third quarter.

"This is ramping up dramatically because our customers are realising that this is not just a lab thing," he said.

"We can expect deployments as early as Q1 next year, in some of the operations that we are building these days."

Guillén won't be drawn on whether some of those 2.4 million "vector-ready lines" belong to Telstra. Both Telstra and NBN Co are trialling FTTx with Alcatel-Lucent equipment.

"I cannot disclose that," he said. "What I can tell you is we have 55 pilots worldwide and 17 commercial contracts, which is a significant number already." Asked which camp Telstra is in, Guillén responded: "I can't say".

Path to

Guillén does plan to present technology to NBN Co as a potential way to scale copper speeds well beyond 100Mbps in future, though he's keen to avoid the hype generated by July trials with an Austrian telco that achieved speeds over 1Gbps over new cabling and short distances.

"It's a promising technology that we have in our labs," he said. "We have done some trials with some customers and the results are outstanding, but we have to be realistic. We have to reach the right point of cost."

On older, unshielded copper cables, vectoring is the key to higher speeds with With vectoring, Alcatel-Lucent achieved 500Mbps over a distance of 100m; without it, the speed dropped to 60Mbps — well below the potential of even VDSL2 vectoring.

In addition, while standards are still being worked on, the first iteration does not include vectoring, according to Guillén.

"You need vectoring," he said. "We need to wait until the second phase of the standard is ready so that's going to be maybe Q3 next year. Then we need to develop the chipsets, so realistically [ is] not going to be [in production] before 2016.

"I'm going to push to have it ready as soon as possible but I have to be realistic."

What is he going to tell NBN Co about

"I'm going to tell the truth," he said. "I'm going to tell them what the situation is because there is a lot of people making noise on but the reality is ... these things take time."

The world is still watching

Despite an expected reboot of the NBN deployment model, Guillén still sees the project as "a showcase for the world".

"I think the world is [still] looking at what happens there," he said.

Ry Crozier travelled to Alcatel-Lucent's 2013 Technology Symposium as a guest of Alcatel-Lucent.

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