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Alcatel to Spur Indonesia Broadband

Zacks Equity Research

Alcatel-Lucent (ALU) recently inked an agreement with Telkom Indonesia, a leading network and telecommunication service provider in Indonesia, to build optical transport network in the country in order to support national broadband growth. Alcatel-Lucent will build the optical network in the areas of Kalimantan, Sulawesi and greater Jakarta, which generates the bulk of Telkom Indonesia's data traffic.

The next-generation agile optical network will be based on converged wavelength division multiplexing/optical transport (WDM/OTN) technology. This technology will assist Telkom Indonesia to provide 100 gigabits-per-second (100G) capability, covering 50% high-speed broadband traffic in its designated service areas.

Alcatel-Lucent’s WDM/OTN technology is expected to address the burgeoning demand for high-bandwidth mobile services, such as high-definition video streaming, next-generation mobile broadband applications, multimedia and other data-intensive applications.

By pairing with Alcatel-Lucent, Telekom Indonesia is expected to meet the increased demand of network capacity at a cost-effective rate, which in turn is likely to boost its top-line growth.

Alcatel-Lucent is a leading global communication equipment company and provides innovative products in IP and cloud networking and ultra-broadband fixed and wireless access to service providers and their customers.

Alcatel-Lucent has been strategically forming alliance with a number of telecom companies to provide technology backup services for wireless broadband. Recently, it also formed an alliance with Surfline Communications Ltd. and Telenor Group to provide 4G LTE network and high speed internet services.

Alcatel-Lucent currently carries a Zacks Rank #3 (Hold). Relatively better players within the Computer and Technology sector worth mentioning include AVG Technologies N.V. (AVG), Alliance Fiber Optic Products Inc. (AFOP) and Akamai Technologies, Inc. (AKAM), each holding a Zacks Rank #1 (Strong Buy).

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