Lucent emphasized the growing importance of its Worldwide Services Division, which is working to create value for operators by finding new services that generate incremental revenue. Once such service is 'Advertext', through which the vendor is proposing to sell the unused space in an SMS message to advertisers (according to Lucent, 70% of SMS capacity is unused), generating a new revenue stream for mobile operators. Advertext does not break the data protection guidelines because it is a permission-based service: it is the user who decides if he/she wants to send/receive an SMS with an advert on it.

In order to develop more new services, Lucent and other vendors aim to move operators towards an IP network architecture, allowing them to reduce their OPEX while at the same time offering users the possibility of receiving a wide range of telecommunications services (currently available over wireless, wireline, ADSL etc) from one single provider. According to Lucent, operators are still only in the early stages of migration to converged IP networks and the evolution will take five to ten years. The process could be accelerated according to Lucent, however, if one operator were to take the initiative in embracing the new technology, spurring others to follow. Despite the long-term benefits, there is currently a reluctance among operators to move towards IP architecture because of the initial capital expenditure it would require at a time when many are already currently investing in 3G networks.

It is likely that operators will form alliances to grow into new areas and to support a full range of services as the IT, consumer electronics and communications industries converge. All-IP networks can meet the needs of converged wireless/wireline operators and Lucent is currently well positioned to develop IP-based platforms for fixed-line operators because of its strong commercial relations with a number of fixed-line operators. Lucent highlighted the concept of seamless communications (whereby a user moves from his office to his home, while the connectivity and functionality is maintained across different technologies, whether they be wireline or wireless, 3G, Wi-Fi or WiMAX) but cautioned that the IMS (IP Multimedia Subsystem) concept would only increase ARPU and reduce churn if operators kept the experience simple for subscribers even as network complexity increased.

Lucent has positioned itself in the high-growth segments like VoIP softswitching (both in the fixed-line and the wireless markets, following its acquisition of Telica, a VoIP vendor, in August 2004). Lucent's current product portfolio aims to meet and exceed its internal goals of getting into the accounts of big customers (such as Telefonica and KPN) with lab trials that it hopes it can translate into contract wins. For all that this strategy may bring success in the future, however, Lucent has already missed the boat with regard to W-CDMA contracts in Western Europe, where it has not been awarded a single W-CDMA infrastructure contract. It is meanwhile focusing strongly on CDMA-450 in Europe where it is supplying three CDMA-450 networks in Russia and Romania.

The very title theme of the presentations in Nuremberg, 'Architects of Next Generation Convergence', signified Lucent's goal to emerge as one of the leading vendors in an age when operators are migrating their networks towards converged IP systems. The company aims to create value over IP for its customers by providing applications over an IP Multimedia Subsystem (IMS). Lucent has a clear vision of how it will develop its product portfolio to position itself as a leader in the communications and networking equipment space in the long term, helping its customers to build the converged NGNs of the future. However, it is dubious that this new vision can be translateed into growth in the short term. Lucent has to demonstrate that the drag of declining expenditure on its legacy portfolio can be more than balanced out by increasing operator expenditure on products from the high growth NGN portfolio.