"We are pleased to expand our long standing relationship with Nokia Siemens
Networks," said Tzvika Friedman, president and CEO of Alvarion.  "For
certain operator customers, we believe this collaboration will deliver a strong
business case through the most advanced, best-in-class WiMAX network solution
that leverages Nokia Siemens Networks’ solid experience in local market
execution and support capabilities — key elements that fit well within our Open
WiMAX strategy."

Alvarion continues to
win new WiMAX business globally and is considered a stable company that
offers transparency through it’s public listing on both the Tel Aviv and NASDAQ
stock exchanges.  Alvarion was burned  last year by a similar
arrangement with now bankrupt Nortel Networks, causing an impact to its fourth
quarter earnings.  Alvarion’s  partnership with NSN should help them
sell more equipment through a new "value added" sales channel.  Nokia
Siemens Networks has a significant professional services division and OSS
capabilities that can support network planning, integration, and management
(more on this below).

Comment and Analysis: A Shift in Strategic Direction for NSN

There have been other WiMAX original equipment manufacturing (OEM) deals that
involved collaboration and joint investment – Fujitsu partnered with Airspan and
Nortel Networks also resold Alvarion’s equipment.   But this agreement
does not involve any joint development or investment.  Why not?

Probably because NSN views the overall WiMAX market as being much smaller then
it envisioned just a couple of years ago.  More importantly, they evidently
see much better potential in being a "managed equipment and operations" or OSS
provider.  We think that NSN wants to concentrate on management and
maintenance of network equipment in order to score more network outsourcing
deals like the one they cut with Embarq last summer (NSN is managing Embarq’s
U.S. network operations centers).  We’re sure that Sprint’s multi-billion
dollar outsourcing deal to Ericsson caught the attention of senior NSN
executives. 

Meanwhile the WiMAX network equipment market has likely turned out to be more
competitive and smaller than anticipated.  Low cost Chinese vendors like
Huawei and ZTE are driving prices down.  So the profit margins on hardware
are just not there.  But OSS and network management are another story and
NSN will maintain its WiMAX services business by supplying consulting, systems
integration and network management for any operator that needs help.

"While we’re no longer developing an in-house product for WiMAX, mobile WiMAX is
still a part of our portfolio, and we continue to work with customers interested
in WiMAX through a partner or reseller approach, using products from third
parties and then offering our suite of services capabilities," an NSN
spokesperson wrote in an e-mail.

What Can NSN’s Existing WiMAX SP Customers Expect?

According to the

Nokia Siemens Networks web site :  "Our track record already comprises
18 WiMAX references in 14 countries."  It also talks quite a bit about end
-to-end solutions, which will no longer be pursued:  "Our WiMAX E2E
solution can be a key factor in assuring your users a true quality of experience
and reducing your costs.  Nokia Siemens Networks now unlocks the true
potential of broadband with this end-to-end solution for the deployment and
operation of WiMAX networks.  WiMAX delivers a unified stream of voice,
data, and video, meaning that you can offer a better service at a lower cost
while improving customer satisfaction.  Each WiMAX base station enables
operators to provide cost-effective broadband wireless access for hundreds of
users and, of course, both mobile and fixed services can be provided by
deploying networks based on WiMAX."

In our opinion, the challenge for NSN will be to integrate Alvarion’s Mobile
WiMAX gear with that of their own in the 18 WiMAX networks they reference. 
It should be noted that the IEEE 802.16 standard is only a RAN (radio access
network) interface from Base Station to Subscriber Station and not an end-to-end
specification.  While the WiMAX Forum profiles provide complete end-to-end
specifications, they are not standardized across all vendors (see the

controversy regarding Profile C,  a WiMAX Forum spec on the interface
(R6) between the BTS and the ASN Gateway.)

NSN Still Very Bullish on the Mobile Internet:  But Focus is on 3G and
LTE

According to a

press release issued Thursday, NSN predicts that Mobile data will outstrip
voice traffic by 2011.  The company also just recently notched its 500
millionth mobile data user.  "With an increasing number of subscribers
logging on to the Internet to access and download data on mobile devices, mobile
data traffic growth is doubling every year.  In fact, Nokia Siemens
Networks expects that at current rates, by 2011, mobile data will overtake voice
traffic*, growing exponentially until 2013.  Keeping pace with this rapid
growth is Nokia Siemens Networks- the company has reached the 500 million mobile
data user milestone, accounting for roughly 40% of global mobile data traffic
today."

Interestingly, there is no mention of Mobile WiMAX in the press release. 
Instead, NSN’s range of packet core network solutions is highlighted.  The
packet core technology is said to allow operators to handle a huge number of
mobile consumers, even if they are using data services heavily, with a very
small amount of network equipment.  The "Direct Tunnel innovation" is said
to "provide operators with a simpler "flat" connectivity architecture, makes
scaling with growing traffic much easier and more importantly, commercially
viable."

So it looks like this is where NSN sees its future growth in wireless
infrastructure equipment.  It’s in 3G-HSPA+ and LTE packet core network
equipment.  It was not likely a coincidence that this press release was
posted on the same day the Alvarion reseller agreement was announced.

Alan J.  Weissberger
WiMAX360 Moderator

Open Range plans to use WiMAX technology to deliver broadband services to
un-served and underserved communities in America – offering portable and
eventually mobile voice and internet services to its planned coverage areas
including western states California, Colorado and Nevada; Midwestern states
Wisconsin, Illinois, Indiana, Ohio and Nebraska; southern states Arkansas,
Alabama, Florida, Georgia and South Carolina; and eastern states Pennsylvania,
New York, New Jersey and Delaware. 

"We are excited that we are able to be involved in such a visionary program that
can bring broadband services to un-served and underserved areas to the rural
US," said Greg Daily, President for Alvarion North America.  "You are
looking at a 4G state-of-the-art network that is going to roll into rural
America, similar to a metropolitan area and frankly, better than a lot of
metropolitan networks."

The network will be built on Alvarion’s WiMAX Forum® Certified? 802.16e
BreezeMAX® solution utilizing spectrum in the upper 2.4GHz ATC band, based on an
arrangement with mobile satellite and data provider Globalstar.  Last
November, Globalstar received an Order and Authorization ruling from the FCC
allowing Globalstar’s spectrum to be used for Ancillary Terrestrial Component (ATC)
services in the US.

"Its a ground breaking project from many perspectives," said Daily.  "In
addition to our own RAN (radio access network) solutions and CPE (customer
premise equipment), we are also integrating the backhaul, IP core and ASN
gateway and AAA server functionalities.  In terms of the network build-out,
we are the lead system integrator."

The deal reflects a major milestone for Alvarion and perhaps offers a glimpse of
the types of deals to come.  For the past 18 months, the company has been
signing-up smaller turn-key projects including ICE in Costa Rica and VMAX in
Taiwan, but this one is unprecedented in terms of size and scope.  Open
Range reflects the second service provider for Alvarion that has received Rural
Utilities Services (RUS) funding.  In April, Main Street Broadband
announced that it had selected to deploy Alvarion equipment after securing $34M
in RUS funding.

The announcement sends a strong signal for the overall wireless broadband
industry and WiMAX technology in particular.  With the first Notice of
Funds Availability (NOFAs) from the Broadband Stimulus Funds due out at the end
of this month and subsequent release of funds later this year, I’m sure we can
expect to see more of these deals in the near future.

The company has also developed some innovative applications, including a
connection manager that allows users to seamlessly connect between different
access technologies including WiMAX and Wi-Fi.  In addition, the provider
has an exclusive relationship with FON that allows its subscribers to leverage
reportedly the world’s largest Wi-Fi community in the world.  "No one
technology can serve the needs of all and these types of solutions provide
flexible alternatives," said Gorbunov.

Alexander Gorbunov, Comstar

Hung Song, Vice President Global Marketing Group, Samsung delivered a keynote
illustrating the potential for WiMAX to do for the internet what voice did for
cellular networks.  "In the next five years, there will be more mobile
broadband than fixed", commented Song.  The Samsung executive also outlined
the many vertical opportunities for WiMAX including government, healthcare and
education and the impact it can have on improving people’s lives and standards
of living.  As a leading WiMAX provider, Samsung has provided Mobile WiMAX
solutions to 24 major mobile WiMAX operators in 20 countries for commercial or
trial service including Clearwire in U.S, UQ Communication in Japan, Yota in
Russia and YTL e-solution in Malaysia.

Hung Song, Samsung Electronics

WiMAX equipment provider Alvarion announced 3 new WiMAX deployments this week
with Mobitel in Nigeria, Telikom PNG in Papua New Guinea and public utility
operator Hafslund in Norway.  What was interesting was the diversity in the
types of deployments with regards to geography, customer base and business
models.  During his keynote, Tzvika Friedman, CEO for Alvarion commented on
the flexibility of WiMAX and the numerous applications that can be delivered
over an open IP based network.  "Open WiMAX allows for more innovation and
enables operators to move quickly in providing new applications and services,"
said Friedman.  The company also reportedly leads in WiMAX deployments with
over 250 commercial deployments across a wide range of business models.

Tzvika Friedman, Alvarion

The afternoon sessions continued with additional tracks on securing capital for
broadband investments and updates on device/equipments certification and
interoperability testing.  We will have a complete wrap-up of the event
early next week.

Footnote:  In attempting to post this update earlier in the week,
I experienced first-hand the frustrations of not having easy access to
broadband.  For many business travelers, internet access while on the road
is often an "emerging broadband market." In my own experience, the Amsterdam
hotel where I was staying charged $25 euros for 24 hours for service that was
often either not available or difficult to connect to – requiring multiple calls
to the front desk, numerous access codes, etc.  With Worldmax now providing
WiMAX in Amsterdam and WiMAX roaming on the horizon, perhaps one day these
problems will be a thing of the past.