The Wall Street Journal-20080213-Alcatel Sets Advanced Broadband Venture

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Alcatel Sets Advanced Broadband Venture

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Alcatel-Lucent said it is setting up a joint venture with Japan- based NEC Corp. to pool research-and-development resources to develop an advanced mobile-broadband technology known as long-term evolution, or LTE.

Analysts have noted that Alcatel needs to invest in developing LTE, which is an extension of the wireless GSM standard used in much of the world. The Paris-based company last week posted a fourth-quarter loss and took a $3.7 billion write-down to cover the value of the waning CDMA standard, a rival to GSM. CDMA technology is popular in the U.S. and South Korea, while GSM is used in much of the rest of the world.

Major U.S. carriers including AT&T Inc. and Verizon Wireless, a joint venture of U.S.-based Verizon Communications Inc. and United Kingdom-based Vodafone Group PLC, are choosing LTE over other advanced broadband technologies such as WiMax. The LTE technology is being developed by leading equipment makers including Telefon AB L.M. Ericsson, Nortel Networks Corp. and Nokia Siemens Networks, a joint venture between Nokia Corp. and Siemens AG.

Alcatel-Lucent and NEC plan to put their platform for LTE on trial in 2008 and to deploy it in 2009.

"This is an offensive play, at an early stage, to accelerate our time to market with LTE," Alcatel-Lucent Chief Executive Patricia Russo said at a news conference at the Mobile World Congress in Barcelona, where the companies announced the joint venture.