Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Ocelot: A Different Breed for Lucent

China Unicom's plans for a mobile-phone network presented enormous challenges. The $1.5 billion project announced in May, 2001, covered 70 cities in 10 provinces of China, an area comparable to the eastern half of the continental U.S. The deployment's most complex aspect was tuning the 3,800 antennas attached to towers and buildings throughout the region. That's usually a labor-intensive process in which field workers drive around in trucks and adjust each antenna by hand.

In Unicom's case, the process was made easier because of a technology from Bell Labs, the research arm of Lucent Technologies (LU). The technology, called Ocelot, allowed engineers to tune all of the antennas remotely, using an automated software system. Reducing the need to send workers into the field typically trims network deployment costs by 10% to 20% and cuts the rollout time by months. Ocelot helped Lucent win a $400 million contract for the China Unicom project.

"RAMPING IT UP." At a time when wireless phone companies are struggling to lower their debt and reduce deployment costs, network-optimization tools such as Ocelot should find plenty of demand. The global market is about $300 billion and is growing 10% a year, says Philip Marshal, an analyst with consultantcy Yankee Group. By contrast, the overall telecom-equipment market is expected to be roughly flat in 2003.

Ocelot could play a role in helping Lucent, which has reported 10 straight quarterly losses, get back on its feet. In addition to gaining traction in Asia, the product has also been sold to domestic customers, such as Verizon Wireless, the largest U.S. wireless carrier. "Ocelot is already available in the field, and we're ramping it up this year," says Gee Rittenhouse, director of wireless research at Bell Labs. "It should provide the company with an important new revenue stream." (For a Q&A with Rittenhouse, see "What Makes Lucent's Ocelot Run".)

Ocelot technology isn't limited to carriers that use Lucent equipment

Lucent is finding new ways to ensure that it makes the most of its investment in Ocelot, which took about four years to develop. In the past, Lucent and former corporate parent AT&T (T) had trouble turning Bell Labs' innovations into products. Most famously, AT&T years ago gave away the rights to the original cell-phone technology, which was developed in the labs.

How have things changed? Lucent is making the Ocelot technology available to all carriers, even those that built their networks with equipment from Lucent's rivals. That would have been unthinkable in the past, when Lucent and other big equipment makers used proprietary standards to force customers to spend all their money with one vendor. The new policy has yet to attract any new business, but it's an encouraging sign that Lucent is embracing open standards. In time, that should help it broaden its market.

ANALYZE THIS. The new business model is being applied to other technologies coming out of Bell Labs as well. Another example is something called NetInventory, which creates an automatic inventory of a network's components and analyzes how they're linked. The technique, known as topology, has become increasingly complex as data routers, hubs, and switches are added to traditional voice networks. According to Lucent, NetInventory is one of the few software applications that can analyze equipment from any vendor. It also runs on a variety of open platforms, from Unix to Windows to Linux. That means NetInventory can be marketed as a service to any wireless carrier in the world, regardless of whether its network was built with Lucent components.

Ocelot faces plenty of competition from rivals such as Nokia (NOK), Ericsson (ERICY), Marconi, and Motorola (MOT). One key rival, Schema, is located in Rochelle Park, N.J. Founded in 1995 as a wireless network-optimization specialist, Schema has already done business with carriers such as Verizon Wireless, Cingular Wireless, and Bell South (BLS).

Rittenhouse acknowledges these rival products, but he insists that they lack Ocelot's features and sophistication. Schema spokesman Josh Klein disputes that characterization. "I have not heard from any customers or analysts that their product is superior," he says.

Still, Ocelot is a step in the right direction for Lucent. The product isn't large enough to make a huge difference in the company's near-term financial performance. But it's encouraging that Lucent has continued to develop new technology in the midst of the industry's unprecedented downturn. Just as important, it's developing new business models to make the most of them. By Steve Rosenbush in New York

blog comments powered by Disqus