Lucent enters market, exits business

Lucent Technologies Inc. this week unveiled a compact Class 5 switch targeted at rural local exchange carriers, cable companies and other independent operating companies.

The iGEN Compact Switch consists of a single 23-inch-wide shelf. Lucent claims it can reduce IOC operating expenses by 90 per cent.

Valley TeleCom Group of Willcox, Ariz., will deploy the switch in a field trial in January. The iGEN will also be generally available at that time.

Valley TeleCom consists of four companies that cover more than 10,500 miles of territory serving over 32,000 customers in Arizona and New Mexico. The IOC plans to deliver a package of services containing dial tone, long-distance, cellular, video-based television, voice mail and high-speed Internet access off of the new Lucent platform.

Lucent will see the switch through its Global Business Partners. Support for the product will be provided by these partners as well as Lucent Worldwide Services.

Lucent has been aggressively building up its services business and partnering efforts as it exits markets and cancels product lines in an attempt to regain profitability after years of losses.

The small Class 5 switch equipment market in North America is expected to grow from an estimated $44.5 million last year to $875.5 million in 2006, Lucent says, citing data from Infonetics Research. In the IOC market, which Lucent has largely ignored up to now, the company will compete with Nortel’s widely installed DMS 10 switch, Siemens’ DCO switch, and next generation platforms from Taqua.

“We found that we could be extremely competitive from a cost/feature standpoint,” says Ken Arndt, vice president of marketing, Lucent Technologies Convergence Solutions business. “Vendors abandoned and then re-entered the market, made changes and costly upgrades. There weren’t many people lining up to serve this market. We decided to enter it in a big way, and we chose to partner with companies that have existing (IOC) relationships.”

The iGEN scales from 32 to 10,000 subscribers in a single shelf. The operational savings come from efficiencies in installation, heating, cooling, power, spare parts, maintenance and office space, Lucent claims.

Competing small switches might require several cabinets to support 2,000 subscribers, Lucent says.

Lucent will submit the iGEN Compact Switch for certification by the U.S. Department of Agriculture’s Rural Utilities Service (RUS). The company expects to be RUS-certified by the time the switch ships early next year.

RUS enables rural carriers to apply for low-interest loans and grants to purchase RUS-accepted equipment.

The iGEN supports a core set of Class 5 services including voice mail, custom calling features – call forwarding, call blocking, three-way calling, call waiting – class features, such as call screening, caller ID, automatic callback and call trace, and regulatory features like e911, CALEA and local number portability. It adheres to GR.303, V5.2, ISDN, SS7 and AIN cable and telephony standards.

Lucent says the iGEN will support next generation call control for IP endpoints and interoffice connections at some point in the future. At that time, the switch will support voice-over-IP, Web-based contact centers and Web portal services.

Lucent did not disclose pricing for the switch.

Separately, Lucent sold its Open Network Services platform business (OPENet) to an investor group led by Soros Private Equity Investors and Oak Investment Partners. The business has been relaunched as an independent company, Excel Switching, which is what it was called when Lucent acquired the Hyannis, Mass., company for $1.7 billion in 1999 to form OPENet.

Terms of the deal were not disclosed.

Under the arrangement, Excel is now a privately-held company developing and marketing its programmable Converged Services Platform (CSP) switches to new and existing customers. The company already has 125 customers, 150 employees and has shipped 7,000 units.

Lucent will resell Excel’s CSP under an OEM arrangement. The CSP performs tandem switching, bridging circuit switched and IP wireline and wireless networks. The CSP provides IP and PSTN call control, media processing and signaling.

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