Ericsson and Alcatel-Lucent Win the Verizon Wireless LTE Sweepstakes; Clearwire Talks Trash

Posted by: Spencer Ante on February 18, 2009

The battle for the fourth generation wireless networks is officially on.

At the Mobile World Congress trade show in Bareclona today, Verizon Wireless announced that it has selected Ericsson and Alcatel-Lucent to provide the bulk of the telecom equipment for its new fourth-generation wireless network. Verizon also tapped Starent Networks to provide some gear as well. This win can translate into billions of dollars in business over the next few years.

The stocks of all three companies jumped 1.5% today, while the major indexes were flat or down slightly.

There were a few losers as well. The decision is a blow to other equipment suppliers that participated in trials with Verizon and Vodafone but weren’t selected to build the network: Nortel Networks Corp., Motorola Corp., Huawei Technologies Co., and Nokia Siemens Networks, the joint venture between Nokia Corp. and Siemens AG.

Nokia Siemens wasn’t a total loser, though. It got picked to be a supplier for one of the network’s subsystems that will run multimedia applications.

Known as Long-Term Evolution, or LTE, the new technology will give wireless consumers a true broadband experience on their cell phones and handheld devices so they can watch high-quality video and listen to music without delay or interruption.

Verizon plans to offer the so-called LTE network starting in 2010. Field trials of the network in Minneapolis, Columbus, Ohio, Northern New Jersey and Europe have demonstrated download rates of 50 to 60 Mbps.

Verizon’s announcement also spooked investors in Clearwire, which is offering a service on a competing technology called WiMax. Verizon Wireless’ 4G LTE deployment uses the company’s recently acquired 700 MHz spectrum. WiMax, which is backed by Sprint, Clearwire and tech industry heavyweights such as Intel and Google.

Clearwire’s stock fell more than 2% on the news, as well as the announcement by Comcast that it took a $600 million write-down on its $1 billion investment in Clearwire.

Clearwire even put out a release in response to the Verizon news, trying to spin a negative into a positive. In the statement, Clearwire made the bold claim that “today, Clearwire customers experience better speeds and bandwidth than what is being described as next year’s LTE networks.”

Let the trash talking begin!

- Spencer Ante also publishes the Creative Capital blog. Click here to see more.

Reader Comments

Suresh Kurapati

February 19, 2009 11:25 AM

I am a Verizon Wireless customer for the past 5-6 years and never had any issues with their service(except for their customer service :-) ) .
Now,that they are building 4G networks with download speeds better than their Fios wired network is definately NEWS.
VZW , I am your customer for life.

stevet

February 19, 2009 9:44 PM

lte is but a pipe dream for most of us. they want the government funds and have to show obama that a network is in place.

i say go wimax. cheaper and more widely used than lte will ever be

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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