Caution...Alot of reading!
Hi Mike,
Lucent Technologies...Our Competion?
Can you show us where or how MRVC has an answer to Lucent's
End to End solutions? They seem very intimidating to a non expert as myself.
John LoBianco
Season's Greetings to All!
Form 10-K405 for LUCENT TECHNOLOGIES INC filed on Dec 22 1997
edgar-online.com
SYTEMS FOR NETWORK OPERATORS
The Company designs, develops, manufactures and services systems and software
which enable network operators to provide wireline and wireless access, local,
long distance and international voice, data and video services and cable
television service. The Company's networks, which include switching,
transmission and cable systems, are packaged and customized with application
software, operations support systems and associated professional services.
Systems and Services
Communications Networking Systems. The Company designs, develops,
manufactures and services advanced communications networking systems, which
include equipment, software and associated professional services. These systems
connect, route, manage and store voice, data and video in any combination, and
are used for: wireline access; local and long distance switching; intelligent
network services and signaling; wireless communications, including both cellular
and personal communications services ("PCS"); and high-speed, broadband
multifunctional communications.
The Company supplies each of the five broad elements that comprise
communications networks: switching systems, which route information through the
network; transmission systems, which provide the communications path through the
network that carries information between points in the network; operation
support systems, which enable service providers to manage the work flow,
planning, surveillance, management, provisioning and continuous testing of their
networks; intelligent network/application software, which enables service
providers to offer a broad array of enhanced and differentiated services; and
cable systems, which provide the transport media between points in a network.
These systems collectively comprise the infrastructure that enables
telecommunications network operators to provide traditional narrowband voice
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and data services and that enables both new and traditional network operators to
offer broadband multimedia services.
The Company has a wireline local access installed base (the number of access
lines serviced by switches manufactured by the Company) of approximately 120
million lines. The Company's primary switching products are the 5ESS(R) switch
for local and long distance switching and international gateways, and the
4ESS(TM) Digital Switch (the "4ESS switch") for long distance and international
switching.
The 5ESS switch is used throughout the world to provide a combination of
network applications, including local and long distance switching and
international gateways, operator services, network signaling, intelligent
networking and wireless switching. The 5ESS switch, with the Company's 5E12
AnyMedia(TM) software, enables network operators to offer a large number of new
data services and local number portability, as well as simultaneous wireline and
wireless, local, long distance and international services.
The 4ESS switch, which was developed for and is primarily deployed in AT&T's
network, is used to provide domestic and international long distance switching.
The 4ESS switch can handle over 1,000,000 peak hour calls.
The Company designs, develops, manufactures and services a broad range of
transmission access and transport systems. Network operators use these systems
to transport any combination of voice, data and video between subscribers and
the central office or between points within a network engaged in local, national
or international communications.
World standards for transmission systems have undergone rapid technological
change in recent years. One new standard, known as Synchronous Optical Network
("SONET") in North America and SDH in other markets, maximizes transmission
capability and simplifies network management for network operators. The Company
markets systems supporting both standards.
The Company offers a broad line of transmission access systems for the
provision of a wide range of services, including traditional telecommunications
service and broadband multifunctional services. Transmission access systems
transport information between the subscriber and the central office. The
Company's products include SLC(R)-2000, which extends fiber-based optical
transmission into the local loop. The Company's products also include the
SDV-2000, a switched digital video system which extends fiber to the curb, and
ASOS, which enables network operators to manage the work flow, planning,
surveillance, provisioning and continuous testing of their multifunctional
networks.
The Company's transmission transport systems are utilized for high capacity
communications between points within a communications network. Many of these
products are primarily digital and provide for the movement of any combination
of voice, data, and video across fiber, coaxial and microwave based media. The
Company's products include fiber transport systems (FT 2000), digital
multiplexer systems (DDM 2000) and the digital access and cross connect systems
(DACS family of products).
The Company has announced enhancements to its high-capacity Dense Wavelength
Division Multiplexing (DWDM) product line including a solution that directly
supports a wide range of SONET and high-speed data rates used in metropolitan
areas -- Metro Optical Line Solution (OLS) allows service providers to
economically transport a wide range of services, such as voice, video and data,
with the same circuit pack over the same fiber.
The Company's operation support systems enhance a network operator's ability
to activate, manage and maintain its networks. These systems continuously
monitor network performance and activity level, and allow for rapid trouble
identification, load balancing and planning for network utilization. The
Company's systems support the efforts of network operators to reduce operating
costs and minimize labor by automating labor intensive tasks.
The Company's network management systems offer a broad array of modular
software, including element managers designed for traditional telephony, video
and wireless; network managers that monitor, test and optimize the utilization
of a network; service managers that manage work flow; and business managers that
include customer service
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systems. For example, the Company's NetMinder system is an advanced network
management routing system that mitigates network congestion through efficient
call routing and completion.
The Company's A-I-NET(R) intelligent network products enable network
operators to offer new services that can be created, deployed or managed by
themselves, the Company, or third parties. Services created with A-I-NET
products include toll free calling (800 and 888 service in the United States),
call forwarding, call waiting, voice dialing and messaging.
The Company has introduced products to address the growing demand for
emerging broadband multifunctional services which permit the simultaneous
transmission of any combination of voice, data and video, such as its high
capacity Asynchronous Transfer Mode ("ATM") switching product, the
GLOBEVIEW(R)-2000 Broadband System.
In addition, the Company designs, develops, manufactures and services cable
systems, which include optical fiber, fiber optic cable, and apparatus for both
fiber and copper cable systems. The Company's cable systems are used to connect
various devices in a network and terminal devices to public and private
networks. These cable systems are deployed for outside plant and central office
wiring, and for traditional telephony, cable television, wireless networks and
broadband applications.
The Company also supplies fiber optic cable systems, high strength, high
performance fiber for underseas cablers and outside plant turnkey systems, which
are generally large capital projects in emerging markets for the engineering and
construction of telecommunications infrastructure. The Company's TRUEWAVE(R)
optical fiber enables network operators to reduce their costs by increasing the
distance between optical amplifiers.
Wireless Network Systems. The Company designs, develops, manufactures and
services wireless network infrastructure systems, which include the 5ESS switch,
base stations, wireless network software and operation support systems. These
systems provide network operators with the capability to offer a wide range of
cellular and other wireless communications services, including PCS, wireless
data and fixed wireless access.
The Company's wireless cellular or PCS systems are in operation in 49 of the
top 50 United States Metropolitan Statistical Areas. The Company's primary
wireless system is the AUTOPLEX(R) System 1000 product family, which includes
the high capacity Series II base station. The base station contains the radio
transceiver that establishes wireless communications with a mobile telephone.
Base stations are arranged geographically so that mobile customers can be
"handed off" seamlessly from one base station to the next as they travel. The
network intelligence to accomplish this is housed in the Company's Mobile
Switching Center, which includes the 5ESS switch and which connects the base
stations to the public telephone network. The Company also offers base stations
for start-up applications and smaller markets, a minicell product for rural and
international markets and a microcell for congested, high traffic areas.
Wireless technology is evolving from analog to digital. The Company provides
networks based on a variety of the leading air interface standards: AMPS, CDMA,
TDMA and GSM.
In addition, the Company designs, develops, manufactures and services fixed
wireless access systems. The Company offers Wireless Subscriber Systems, which
support the AMPS standard, and the new AIRLOOPTM Wireless Local Loop system,
which utilizes CDMA technology. Also, the Company offers systems, based on the
DECT (digital enhanced cordless telephone) standard. All three systems enable
network operators to expand their networks in markets where traditional wireline
systems are not cost justified, and to provide telephone services as an
alternative to traditional network operators.
The Company designs, develops, manufactures, and services CDPD-based wireless
data systems which enable wireless network operators to offer data services as
an overlay to their existing analog voice infrastructure without acquiring
additional spectrum or upgrading to a digital network. These systems offer the
increased reliability and efficiency of switched digital packet data systems.
Due to the complexity of wireless systems, the Company also offers a broad
range of professional services, which include project management, site
acquisition, radio
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frequency engineering, microwave relocation, construction management, cellular
optimization and wireless data support.
Markets
The principal customers for the Company's systems are network operators that
provide wireline and wireless local, long distance and international
telecommunications services, including local, long distance and international
telecommunications companies and cable television companies. The Company's
systems for network operators are installed to expand the capacity and features
offered by existing networks, to replace older technology in existing networks
and to establish new networks for entrants into deregulated or previously
unserved markets. See "Outlook -- Reliance on Major Customers."
As a result of structural, public policy and technological changes, since the
mid-1980's the telecommunications industry has undergone a period of significant
growth in the number of lines in service and applications offered. In developed
markets, deregulation has permitted new market entrants to construct networks in
previously monopolistic markets. In response, existing network operators have
expanded beyond traditional franchises and are offering new services. In
emerging markets, privatization, competition and economic expansion have
increased demand for networking systems. At the same time, technological
advances also have increased demand by reducing operating costs and facilitating
new applications, including multifunctional services.
The Company markets and sells its products worldwide primarily through a
direct sales force due to the complexity of these systems. Most of the Company's
sales of systems for network operators are made pursuant to general purchase
agreements, which establish the terms and conditions and provide for price
determination to be made on a contract bid basis. In addition, certain of the
large infrastructure projects are conducted under long-term, fixed-price
contracts. See "Outlook -- Multi-Year Contracts" and "-- Seasonality."
As a result of the increased complexity of systems for network operators and
the high cost of developing and maintaining in-house expertise, network
operators demand complete, integrated and turn-key projects. Network operators
increasingly are seeking overall network or systems solutions that require an
increased software content which would enable them to deploy rapidly new and
differentiable services. In response, the Company has formed an organization
focused on turn-key network engineering projects for both public and private
sector customers. The Company markets integrated solutions whereby the Company
assumes full responsibility for the project, and engineers, designs and installs
the network, including equipment and software manufactured by both the Company
and third parties.
Increasingly, as a result of the financial demands of major network
deployments, network operators are looking to their suppliers to arrange for
financing. The ability to provide financing is a requirement to conduct business
in certain emerging U.S. and foreign markets, and in some cases the Company
furnishes or guarantees financing for customers. As a result, the Company works
with its customers to structure and place financing packages. See "Outlook --
Future Capital Requirements."
In order to market its product line worldwide, the Company has established
wholly owned subsidiaries and joint ventures with local companies in many
countries.
Competition
The Company believes that its key competitive factors are its broad product
line, large installed base, relationship with key customers, technological
expertise and new product development capabilities. The Company's primary
competitors in the market for telecommunications systems are four very large
European and North American companies which have substantial technological and
financial resources and which offer similar broad product catalogs. These
competitors are Alcatel Alsthom, Northern Telecom Limited, Siemens AG and
Telefonaktiebolaget LM Ericsson. In 1996, the Company and these four competitors
collectively accounted for about 40% of the world's public network systems
sales, with the Company's sales accounting for about 10% of world sales.
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In addition, in all of the Company's product areas other than switching, the
Company faces significant competition from other companies which do business in
one or a number of such product areas. For example, in wireless systems,
Northern Telecom Ltd., Telefonaktiebolaget LM Ericsson, Motorola, Inc. and Nokia
Corporation, which are very large companies with substantial technological and
financial resources, are significant competitors. In transmission and cable
systems, competition in the markets includes hundreds of smaller competitors.
The Company expects that it also may encounter competition from companies that
design and manufacture data network equipment.
BUSINESS COMMUNICATIONS SYSTEMS
The Company designs, develops, manufactures and services communications
systems and products for large and small business customers, home offices and
government agencies. The Company's business communications systems can be
upgraded regularly with new software releases, can support local and wide area
voice and data networking and are often integral components of global enterprise
networks. The Company's systems primarily are customer premises-based private
switching systems and products, call center systems, voice processing systems,
which include voice messaging and voice response systems, and the associated
application software and professional support services. In addition, the Company
has begun to participate in the emerging multi-media products business. The
Company serves over 1.4 million business locations in the United States and
approximately 100,000 business locations in over 90 other countries. |
