Product Assessment: Report Date: Analyst: Service: Market: Class: Current Perspective:

Alcatel-Lucent - 9000 Series

February 09, 2012 Gubbins, Ed Service Provider Infrastructure Mobile Access LTE eNodeB

Summary
Buying Criteria

Current Perspective Alcatel-Lucents LTE base stations are threatening to the competition. They stand out w hen it comes to radio performance, w ith strong receive sensitivity, spectrum support and pow er output options. W here the vendor falls short is primarily in the areas of capacity scalability and multi-standard support. Alcatel-Lucent markets tw o indoor LTE base stations: the 9412 Compact eNode B and the 9926 Baseband Unit (BBU) and Remote Radio Head (RRH). The 9412 base station is a cabinet-based high-capacity solution, w hereas the 9926 is sold as both a high- and low -capacity solution and can be deployed either in a traditional cabinet or in a distributed main/remote configuration. The vendor also markets tw o outdoor LTE base stations: the 9412 and the 9926. In addition, ALU has multi-standard base-station solutions for CDMA2000, GSM and W CDMA that use a common BBU found in its LTE base stations. Longer term, the vendors light Radio announcement from February 2011 promises eventual LTE solutions using active antennas and a C-RAN architecture w ith baseband capacity centrally located and shared among multiple radio/antenna sites. Alcatel-Lucents LTE base stations have strong coverage characteristics and can satisfy various deployment scenarios. Its tw o LTE base stations report market-leading radio receive sensitivity of -122.7 dBm, an important factor in a base stations ability to hear signals from end-user devices. In addition, ALUs gear is broadly applicable, w ith support for a w ide range of spectrum bands and multiple pow er output options. Finally, its stellar customer references, including AT&T and Verizon W ireless, help the vendors image and credibility. How ever, Alcatel-Lucents LTE solutions do have some clear vulnerabilities. W hile ALU can support GSM, W CDMA and LTE in a single base station, each technology requires its ow n BBU. Other vendors can support more than one w ireless standard in a single BBU, allow ing more converged, and possibly simpler, deployments. Another concern for ALU is its overall base station capacity. The 9412 (its highest capacity base station) can scale to support 18 carriers at 20 MHz in tw o-frame configuration. For most operators, this should be more than adequate, given their limited spectrum holdings. How ever, all major competitors claim higher levels of scalability and can exploit this difference in sales efforts. Going forw ard, ALUs light Radio platform promises to bring a number of benefits, potentially improving the portfolios RF performance as w ell as the vendors overall innovation credentials. The products scalability could also allow integration w ith small cell solutions, to w hich ALU has show n a commitment.

Strengths and Weaknesses

Strengths Radio Receive Sensitivity: Alcatel-Lucent promises -122.7 dBm w ith both of its LTE base stations. This is the strongest receive sensitivity reported. Though RF pow er output is important for getting RF signals out to users, Weaknesses LTE Carrier Support High-Capacity: Alcatel-Lucents 9412 Compact eNode B supports nine carriers at 20 MHz in a single frame and 18 carriers at 20 MHz in its maximum capacity. Even if 18 carriers is more than enough to meet

strong receive sensitivity allow s a BTS to hear signals from low -pow er devices (e.g., handsets). Spectrum Support: Alcatel-Lucents LTE base stations come w ith very generous spectrum support, covering 700, 800, 900, 1700, 1800, 1900, 2100, 2300 and 2600 MHz, and AW S bands. Among major vendors, only NSN offers a w ider array of spectrum band support. The more spectrum bands available w ith a base station, the more deployment scenarios it can satisfy. Multiple Pow er Output Options: Alcatel-Lucent offers mobile operators three different pow er output options 40, 60 and 67 W . W hile some competitors promise higher output pow er levels, ALUs promise of multiple options distinguishes it from key rivals and Ericsson in particular. Multiple pow er options allow operators to select the pow er requirement best suited to their ow n needs w ithout forcing them to overpay for a higher output pow er level. Base Station Mass: ALUs high-capacity base station, the 9412, w eighs 135 kg, making it one of the lighter cabinetbased eNodeBs on the market. Lighter base stations can be easier to install, allow ing savings on installation labor or equipment. LTE Carrier Support Low -Capacity Base Station: AlcatelLucents low -capacity base station, the 9926 Digital 2U eNodeB+RRH, delivers a maximum of three carriers at 20 MHz, w hich puts it in the middle of competing claims. Low capacity solutions provide service providers w ith an option to extend capacity into hard-to-reach areas: inside buildings, along highw ays, valleys, etc., w ithout overpaying for unneeded capacity. W ith three carriers, the 9926 can help reach those areas w ithout forcing mobile operators to overpay for unnecessary capacity. High-Profile Deployments: Alcatel-Lucents overall market position benefits greatly from its involvement in tw o very large-scale and relatively early LTE deployments AT&T and Verizon W ireless w hich began 2012 w ith the lions share of the w orlds LTE subscribers. W here ALU may not match its competitors in total number of commercial w ins, few can match ALU w hen it comes to scale of deployment. The high-profile nature of these deployments, along w ith their early timing relative to most other such deployments around the globe, testify loudly to Alcatel-Lucents credentials in this space.

most operators needs, it is exceeded by most of AlcatelLucents competitors. This may persuade operators that their investments are better served over the long term by ALUs rivals. Space Efficiency High-Capacity: Alcatel-Lucents 9412 delivers nine LTE carriers in a 0.35 m2 footprint. This equates to nearly 26 carriers per m2, a figure that is bested by all of Alcatel-Lucents major competitors. Space efficiency measures the amount of capacity that can be delivered in a given amount of floor space. W ith base station real estate at a premium, space-efficient LTE base stations deliver more bang for operators bucks. Multi-Standard Support: Though Alcatel-Lucents eNodeBs can support GSM, W CDMA and LTE in a single base station, they require a separate baseband unit for each technology. This sets it apart from most competitors at a time w hen converged solutions are grow ing increasingly important. Reducing the overall number of BBUs an operator needs to deploy can save CapEx and simplify netw ork management. Low -Capacity Base Station Architecture: Alcatel-Lucent offers a distributed low -capacity eNodeB but not an enclosed solution for this application. This stands in some contrast to the vendors focus on 3G small cells and femtocells and could hamper it amid grow ing interest in small-cell solutions. Though the market for such applications is young, interest is grow ing in small-cell deployments to improve coverage and capacity for LTE services. Offering a choice of low -capacity architectures broadens vendors ability to address a variety of market needs. W CDMA Market Traction: Alcatel-Lucent cannot match Ericsson, Huaw ei or Nokia Siemens Netw orks w hen it comes to W CDMA operator references. Supplying operators 3G netw ork needs can help vendors build relationships that can be leveraged into 4G w ins, w here ALU also trails the number of w ins claimed by Huaw ei and NSN. This is especially important in cases w here installed W CDMA RAN solutions include support for LTE, making it easier for operators to stay the course w ith their existing supplier.

Point and Counterpoint

Point NSN and ZTE w ill question Alcatel-Lucent w hen it comes to its small-cell strategy w ith LTE. They w ill point out that ALUs 9926, w hile a low -capacity solution, is not a true small cell. NSNs Flexi Lite BTS and ZTEs BS8908 are both small-footprint all-in-one base stations. The 9926, as a distributed base station, is more difficult to deploy than a small cell, they w ill say. As low -capacity base stations are designed to reach difficult coverage areas, ease of deployment is an important issue. Point Nokia Siemens Netw orks and Huaw ei w ill challenge Alcatel-Lucents LTE w ins at AT&T and Verizon W ireless as being more the result of an established infrastructure relationship than any technology advantage ALU has over them. NSN and Huaw ei w ill say the fact they have a higher number of commercial w ins, 48 for NSN (40 in LTE RAN) and 60+ for Huaw ei, show s that overall they have a stronger, more competitive solution than ALU. Counterpoint Alcatel-Lucent, in its defense, w ill point to its existing success w ith femtocells, w here it claims 27 commercial contracts and 20 ongoing trials as of January 2012. W hile these deployments are for femtocells and not small-cell LTE base stations, Alcatel-Lucent w ill say its past experience show s it has proven expertise w ith small cells that it can translate to LTE as demand for LTE small cells grow s.

Counterpoint Alcatel-Lucent w ill counter NSN and Huaw eis claims by pointing out that both AT&T and Verizon W ireless w ere open to multiple infrastructure vendors and that Verizon named Ericsson as a supplier despite the lack of a previous RAN relationship (before Ericsson acquired Nortels CDMA business), suggesting that incumbency didnt dictate the carriers choices. ALU w ill also point to its grow ing list of LTE w ins made w ithout the benefit of incumbency, such as its Q3 2011 announcement w ith Telefonica in Spain and its Q1 2011 deal w ith Etisalat (UAE). Counterpoint Alcatel-Lucent w ill counter that its 18 carriers at 20 MHz is more than adequate to meet most operator needs. Few

Point Huaw ei w ill argue that Alcatel-Lucents high-capacity base station isnt scalable enough, w ith its maximum LTE

capacity of 18 carriers using 20 MHz channels. Huaw eis high-capacity base station, on the other hand, can scale to 24 carriers at 20 MHz. That extra capacity, even if not needed today, w ill allow operators to scale their netw orks in the future w ithout having to invest in additional base stations, Huaw ei w ill say.

if any operators w ill have more than 20 MHz to commit to LTE, ALU w ill say, adding that it doesnt make sense to base infrastructure purchasing decision on unneeded capacity capabilities. Further, ALU w ill point to its w ork w ith C-RAN architectures connected w ith its light Radio development as an example of future scalability options for operators.

Buying/Selecting Criteria
Base Station Capacity

LTE Carrier Support High-Capacity Base Station: Alcatel-Lucents 9412 Compact eNodeB supports nine carriers at 20 MHz in a single frame, and 18 carriers at 20MHz in its maximum capacity. W hile most of ALUs major competitors promise more capacity, ALUs solution provides more than adequate capacity support based on most operators spectrum requirements. High capacity can have a positive impact on CapEx, as it can help low er the number of base stations an operator needs to deploy in order to service its end-users. LTE Carrier Support Low -Capacity Base Station: Alcatel-Lucents low -capacity base station, the 9926 Digital 2U eNodeB + RRH, delivers a maximum of three carriers at 20 MHz. Only Kyocera, NEC, Nokia Siemens Netw orks and ZTE offer low -capacity solutions w ith a low er maximum carrier level. Low -capacity solutions provide service providers w ith an option to extend capacity into hard-to-reach areas costeffectively: inside buildings, along highw ays, valleys, etc. w ithout overpaying for unneeded capacity that comes from high-capacity base stations. GSM TRX: Alcatel-Lucent reports that all of its LTE base stations, w hen configured as part of its multi-standard RAN solution, provide a maximum of 54 GSM TRX. For both base station classes, this figure exceeds Ericssons 48 TRX and is competitive w ith ZTEs 60 TRX, falling behind Huaw eis 126 TRX. An ability to support a large number of users w ith a single base station, thanks to strong capacity support, helps operators control their CapEx. W CDMA Carriers: ALU claims both of its LTE base stations, w hen configured as part of its multi-standard RAN solution, deliver 24 sector carriers of W CDMA capacity. W hile on the low end of reported W CDMA scalability, the same number is reported by multiple competitors and should meet most mobile operators needs. As end-user migration from one radio technology generation to the next isnt uniform, it is important for infrastructure vendors to provide operators w ith netw orking solutions that have adequate capacity to support all types of users. Capacity Scalability: ALU didnt disclose w hether its low -capacity 9926 eNodeB scales to more than single-chassis configuration, but its 9412 Compact scales to tw o-chassis configuration, supporting up to 18 carriers at 20 MHz. The ability to scale capacity benefits the vendor in terms of addressing multiple deployment scenarios. Scalability benefits operators as it allow s them to plan for grow th in their user base w ithout having to invest in a completely new set of base stations.

RF Performance

Output Pow er: Alcatel-Lucent claims all of its base stations support pow er outputs of 2x40, 2x60 and 67 W per radio. Among the major vendors, only ALU and ZTE lack an 80 W offering (though some may be using their 80 W options to offer 2X40, as ALU does). Pow er output represents a base stations ability to push RF signals out to users. High output pow er enhances coverage by extending cell reach or penetrating deeper into structures. Radio Receive Sensitivity: Alcatel-Lucent promises -122.7 dBm w ith both of its LTE base stations, the strongest receive sensitivity reported among major vendors. How ever the ALU did not note the level of branch diversity (tw o or four) behind this claim. Know ing the level of branch diversity is important in making true head-to-head comparisons betw een vendors. Though RF pow er output is important for getting RF signals out to users, strong receive sensitivity allow s a BTS to hear signals from low -pow er devices (e.g., handsets). Spectrum Support: Alcatel-Lucents LTE base stations come w ith very generous spectrum support, covering 700, 800, 900, 1700, 1800, 1900, 2100, 2300 and 2600 MHz, along w ith AW S. Only Nokia Siemens Netw orks claims support for a w ider range of spectrum bands. The more spectrum bands available w ith a base station, the more deployment scenarios it can support. Antenna Configurations: Alcatel-Lucents LTE base stations support SISO, 2x2 MIMO and 4x4 MIMO, according to the vendor. ZTE reports it currently supports 2x4 MIMO in addition to 2x2. Huaw ei signals it plans to support 4x2, w hile NEC has 8x8 MIMO on its product roadmap. Multiple Input/Multiple Output (MIMO) antenna support is a critical feature of LTE, allow ing for better coverage and/or capacity. Though demand for higher-order configurations like 4x4 MIMO may be thin at present, it could become more important in the long term.

Site Deployment Flexibility

Space Efficiency High-Capacity Base Station: Alcatel-Lucents 9412 supports nine LTE carriers in a 0.35 m2 footprint, or nearly 26 carriers per square meter, a figure surpassed by at least four of ALUs rivals. Space efficiency measures the amount of capacity a vendors base station can deliver in a single square meter footprint. Since base station real estate is at a premium, LTE base stations that can support a high number of sector-carriers in a small space provide OpEx savings. Outdoor Adjuncts: Alcatel-Lucent offers tw o high-capacity solutions for outdoor deployments that share their product name w ith their indoor equivalents, 9412 Compact and 9926 BBU+RRH. W hile most deployments favor indoor base station placement, the availability of an outdoor adjunct allow s the vendor to address a greater range of deployment scenarios. The availability of outdoor adjuncts is fairly common across infrastructure vendors.

 Base Station Mass: ALUs 9412 is one of the lighter high-capacity cabinet-based eNodeBs on the market, w eighing in at 135 kg. The company did not provide data on the mass of its low -capacity 9926. Low er mass base stations can be easier to install and less expensive, as they lessen the need for installation labor or equipment. Remote Radio Support: Alcatel-Lucents inclusion of a distributed main/remote base-station solution, the 9926, puts it in line w ith all of its major competitors. Distributed architectures can provide greater flexibility in siting and deployment, allow ing operators to serve hard-toreach areas or low er traffic areas that dont w arrant a full base station, for example. Transport Options: All of ALUs LTE base stations have the same transport options, w hich generally match competing offers. Circuit transport includes up to 8xT1/E1 and STM1/OC3. Packet transport includes ATM, ATM IMA and Ethernet. A w ide range of transmission and backhaul options enable mobile operators to use multiple transport netw ork architectures and assets, ensuring the backhaul w ill support new data services and aggregate traffic onto higher capacity links for cost savings and efficiency.

Technology Evolution and Market Position

GSM/W CDMA Support High-Capacity Base Station: Alcatel-Lucents 9412 can be configured to support both GSM and W CDMA alongside LTE in a single base station. How ever, each technology requires a separate BBU w ithin the base station. This requirement sets ALU apart from other vendors, such as Ericsson and ZTE, w hich offer support for at least tw o technologies in a single BBU. Operators w ith an eye to the future w ant 2G and 3G solutions that can also support LTE. Infrastructure vendors are also eyeing their multi-standard solutions as a w ay of selling a netw ork refresh at the time of LTE deployment. GSM/W CDMA Support Low -Capacity Base Station: Alcatel-Lucents low -capacity LTE base station, the 9926, can be configured to support both GSM and W CDMA netw ork traffic alongside LTE. How ever, unlike some competing offerings, ALUs multi-standard solution requires a different BBU for each technology. Multi-standard options are becoming more common w ith low -capacity base station options. CDMA2000 Support: ALU also claims support for CDMA2000 in its base stations, scaling to 69 sector carriers w ith the use of its Converged RAN product. How ever, a dedicated baseband unit is required. ALU also reports CDMA2000 solutions that support LTE. W hile not as common as GSM/W CDMA, some infrastructure vendors offer multi-standard solutions that support CDMA2000 alongside LTE, allow ing operators to migrate at their ow n pace. Nokia Siemens Netw orks is the only major LTE vendor that doesnt offer a converged CDMA2000/LTE solution. Market Momentum: Alcatel-Lucent claims 19 commercial contracts and more than 70 trial references, at least half of w hich involve operators for w hom ALU is not the incumbent RAN vendor. ALUs tw o most notable w ins are in the U.S. w ith AT&T and Verizon W ireless. These tw o large-scale deployments have helped the vendor claim a number-tw o market share position w hen it comes to LTE infrastructure revenues. How ever, w hile Alcatel-Lucent enjoys great market exposure and strong LTE solution credibility, it doesnt claim as many customer w ins as Ericsson, Huaw ei, Nokia Siemens Netw orks or ZTE.

Metrics
High-Capacity BTS - Indoor
Model Name Components Outdoor Adjuncts Dimensions Footprint Mass Multi-chassis Max LTE Carriers per Frame Max LTE Carriers Spectrum Support Receive Sensitivity Output Power Options Antenna Configurations Remote Radio Support Circuit Transport Packet Transport GSM Support WCDMA Support CDMA2000 Support 9412 Compact eNode B; 9926 Digital 2U eNodeB + RRH Cabinet; Cabinet or Distributed BBU+RRU 9412 Ultra Compact Base Station Outdoor; 9926 BBU+RRU 675x600x575mm; Data not provided 0.35m2; zero footprint w hen mounted 135kg; data not provided Yes - 2; data not provided 9 carriers @ 20MHz; 3 carriers @ 20MHz

18 carriers @ 20MHz; 3 carriers @ 20MHz All: 700MHz, 800MHz, 900MHz, 1700MHz, AW S, 1800MHz, 1900MHz, 2100MHz, 2300MHz and 2600 MHz All: -122.7dBm All: 2x40w , 2x60w , 67w All: SISO, 2x2, 4x4 MIMO support All: Yes, based on various BBU (9322, 9326) and various RRU (RRH2100, RRH900, RRH850 @ 40W and 60W ) All: 8xT1/E1, STM-1/OC-3 (optional) w hen used w ith converged RAN products ATM, ATM IMA, 100bT/GigE Yes, w ith Converged RAN product- 54 TRX Yes, w ith Converged RAN product - 24 SC Yes, w ith Converged RAN product - 69 SC

TD-LTE Support Commercial Availability Simultaneous Multi-Standard Support Other Models

Yes, up to 9 sectors @ 20MHz; no data provided Currently no, but on product roadmap for 2011 All: GSM, W CDMA, LTE in one base station, but each technology requires a separate BBU 9218 Macro; 9228 Macro; 9216 Compact; 9224 Sub-Compact; 9226 Compact

Low-Capacity BTS - Indoor and Outdoor

Model Name Components Outdoor Adjuncts Dimensions Footprint Mass Multi-chassis Max LTE Carriers per Frame Max LTE Carriers Spectrum Support Receive Sensitivity Output Power Options Antenna Configurations Remote Radio Support Circuit Transport Packet Transport GSM Support WCDMA Support CDMA2000 Support TD-LTE Support Commercial Availability Simultaneous Multi-Standard Support Other Models 9926 BBU + RRU Distributed BBU+RRU Data not provided Data not provided Zero footprint w hen mounted Data not provided Data not provided 3 carriers @ 20MHz

3 carriers @ 20MHz 700MHz,800MHz(EDD), 900MHz, 1700MHz, AW S, 1800MHz, 1900MHz, 2100MHz, 2300MHz and 2600MHz -122.7dBm 2x40w , 2x60w ,67w SISO, 2x2, 4x4 MIMO support Yes 8xT1/E1, STM-1/OC-3 (optional) w hen used w ith converged RAN products ATM, ATM IMA, 100bT/GigE Yes, w ith Converged RAN product- 54 TRX Yes, w ith Converged RAN product- 54 TRX Yes, w ith Converged RAN product - 69 SC No data provided 2010 All: GSM, W CDMA, LTE in one base station, but each technology requires a separate BBU 9222 Micro; 9234 du Distributed

Other
Major Customer Wins Miscellaneous FDD LTE: AT&T, Verizon W ireless, Vimpelcom, Etisalat - TDLTE: China Mobile (CMCC) major Trial in Shangai N/A

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