At Lightspeed

SBC is reportedly lining up Alcatel and Lucent to help kick start its $6 billion Fiber-to-the-Node project, a development that could give the vendors the inside track in supplying equipment for the buildout.

SBC is reportedly lining up Alcatel and Lucent to help kick start its $6 billion Fiber-to-the-Node project, a development that could give the vendors the inside track in supplying equipment for the buildout.

According to reports from investment firms Jefferies Research and UBS Warburg, SBC is lining up Alcatel and Lucent as systems integrators to “fast track” the “Project Lightspeed” FTTN buildout. UBS states that this will leapfrog a formal RFP process – essentially awarding the project to the integrators and their subs right off the bat – while Jefferies says that a formal RFP process will take place next year following a market trial initiated with the two vendors. SBC said it would not comment on its vendor selection process.

Nonetheless, the Jefferies report suggests that Alcatel and Lucent could have the inside track on supplying equipment for the lucrative project given their headstart as market trial integrators.

“The fact that Adtran won’t be part of the market trial at SBC means that Alcatel or Lucent might have an inside track on winning next year’s RFP,” the Jefferies report states. Adtran is an incumbent supplier of HDSL gear and outside plant DSLAMs. Alcatel is also an incumbent DSLAM and digital loop carrier supplier to SBC.

While UBS notes this as a negative for Adtran, Jefferies states there may be some upside for the vendor. The investment firm values the access portion of Project Lightspeed alone at $1.3 billion over five years – no small potatoes to a smaller vendor like Adtran.

“Adtran needs to win just a second or even third source position at SBC to meaningfully impact its forward-looking numbers,” the Jefferies report states.

The market trial is expected to begin in the first quarter of 2005. Its intent, according to Jefferies, is to assess SBC’s ability to deploy video services, the economics associated with building this infrastructure, and the risks and challenges associated with deployment.

The RFP process will follow the market trial. Project Lightspeed is expected to wrap up in 2009.