Though no details were announced, Alcatel-Lucent says contract shows CDMA still has legs

U.S. Cellular is renewing its CDMA infrastructure contract with Alcatel-Lucent but to what extent neither the vendor nor the carrier is letting on. In a release Tuesday, the companies said Alcatel-Lucent is being granted a five-year deal to supply network equipment, software and services, but they didn’t reveal the value of the contract, whether it represented an expansion into new markets or if Alcatel-Lucent would be upgrading equipment or expanding into new markets.

About the only thing the companies said was that Alcatel-Lucent would supply a range of different base stations to fit different deployment scenarios and that the vendor would add greater data capacity to the network, supporting faster uploads and video telephony. One can only assume that means U.S. Cellular will be buying pico cells and microcells to fill out its networks and Alcatel-Lucent will be upgrading its existing CDMA 1X EV-DO gear to Rev. A, which supports faster upstream speeds. Perhaps more telling, however, is the statement Alcatel-Lucent made in the release:

“By once again choosing Alcatel-Lucent to expand and grow its network, U.S. Cellular is demonstrating its confidence not only in CDMA technology but also the CDMA market in general,” Cindy Christi, president of Alcatel-Lucent’s Americas region, said in the statement.

Current Analysis wireless infrastructure analyst Peter Jarich said Alcatel-Lucent is likely trying to signal to the world that CDMA still is a growth market, despite all of the attention on 4G technologies, and that Alcatel-Lucent still dominates that market, despite its recent financial and operational troubles. Alcatel-Lucent has suffered from declining revenues in the U.S. mobile marketplace, a problem analysts are pinning on the newly minted megavendor’s execution rather than a decline in carrier spending. News reports last year revealed Alcatel-Lucent’s UMTS relationship with AT&T was deteriorating, and other vendors have begun picking away at Alcatel-Lucent’s market share as it shut down some of its merger-redundant product lines.

Alcatel-Lucent, however, has been bolstering its business with CDMA contracts, announcing a $6 billion deal with Verizon Wireless shortly after the merger. The vendor has also been picking up smaller contracts here and there, most recently with MetroPCS. The future of the CDMA market is questionable, however, as carriers start looking to 4G technologies. Of the vendor’s two biggest customers, Sprint has already begun to build its next-generation WiMAX network and Verizon Wireless has tapped Long Term Evolution for 4G, though Alcatel-Lucent, among others, is one of the initial trial vendors.