Alcatel-Lucent ALU penned a comprehensive frame deal with two of the world’s largest telecom operators – China Mobile and China Unicom – to assist a smooth transition to the cloud-based networks. The deals are valued at up to RMB4.53 billion (£ 656 million) and RMB3.59 billion (£ 520 million).
As per both the agreements, Alcatel-Lucent will offer numerous of its services comprising IP routing, mobile and fixed ultra-broadband access, Nuage Networks’ software defined networking (SDN) technologies, agile optical networking and network functions virtualization (NFV) capabilities. With the deployment of these highly advanced services, the company will aid China Mobile and China Unicom in meeting the ‘Broadband China’ initiative and catering to the rapidly rising broadband demand of the populace.
Notably, the ‘Broadband China’ initiative entails the broadband coverage spread across China’s urban and rural regions by 2020. In addition, the deal will ultimately aid the Ministry of Industry and Information Technology of China in achieving the goal to access to 100 megabits-per-second (Mbps) fiber across the nation’s municipalities, city districts and most non-urban households by 2017. Alongside, the government has the aim of providing full 4G mobile access in urban and rural areas, at an average network speed of 30 mbps to the residents of major cities and fiber coverage in 80% of administrative villages.
We are encouraged with this contract as it strengthens Alcatel-Lucent’s extensive presence in China over the last 30 years. Additionally, the deal boosts Alcatel-Lucent’s long-standing relationship with both the companies. Through this contract, Alcatel further re-emphasizes the fact that it has repositioned itself as one of the leading providers of IP Networking and Ultra-Broadband Access, as per its Shift Plan.
Alcatel-Lucent currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include KVH Industries Inc. KVHI, SeaChange International, Inc. SEAC and Arista Networks, Inc. ANET. While both KVH Industries and SeaChange International sport a Zacks Rank #1 (Strong Buy), Arista Networks holds a Zacks Rank #2 (Buy).
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