If you live in China and are a subscriber to China Unicom
Out of the 15 million optical ports that China Unicom will eventually deploy, Alcatel-Lucent won the right to supply 6 million of them. The technology they will use is called GPON, or Gigabit Passive Optical Network. It's a cheaper way to bring ultra-high-speed broadband to individual premises at speeds up to 100 Mbps.
China Unicom plans to extend its GPON with Alcatel-Lucent to 29 provinces in China. Earlier in the year, Ericsson
Last September, Alcatel-Lucent signed a deal with China Telecom
And Ericsson took it right to Huawei in March, when it signed a $1 billion infrastructure deal to expand China Mobile's 3G network. That was a bit of payback for Ericsson, as Huawei has been successful recently in getting hold of some of that European capital expenditure, a market that Ericsson thought it owned.
Patents, of course
And just to make things a bit more interesting (think Samsung vs. Apple), there's also been a bit of an open war going on between Ericsson and ZTE as they find themselves competing more and more. Each has filed lawsuits against the other claiming patent infringements.
Alcatel-Lucent has been installing GPON fiber systems for many major carriers around the world, including Verizon
How to take this news
But is Alcatel-Lucent a stock to buy, at least for now? It missed its quarterly earnings guidance and was punished with an 18% plunge just a week ago. The reason CEO Ben Verwaayen gave was "weaker revenues than initially planned in the fourth quarter of 2011."
The global economic upheaval makes carriers more hesitant about committing large capital expenditures, and it makes me hesitant about recommending Alcatel-Lucent, at least for now.
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Fool contributor Dan Radovsky has no financial interest in any of the above-mentioned companies. The Motley Fool owns, and Motley Fool newsletter services have recommended buying, shares of China Mobile. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.