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Alcatel to pick new Wi-Fi partner

Now that Cisco plans to buy Alcatel Wi-Fi switch partner Airespace, the French telecom giant has found a replacement.

French telecommunications gear maker Alcatel next week plans to announce a reseller and joint development partnership with a new wireless Wi-Fi start-up, a source close to the deal said.

As early as next week, Alcatel will announce plans to resell wireless switches and access points from Aruba Wireless Networks under the Alcatel label, the source said. The two companies will also be working together to develop new products that can handle voice over Wi-Fi.

Alcatel, which has been reselling gear from Airespace since March 2004, started getting serious about finding a new partner after rival Cisco Systems announced in January that it was buying Airespace for $450 million.

Alcatel had been in talks with Aruba before the Cisco-Airespace deal was announced, according to the source. Alcatel was supposedly unhappy with its arrangement with Airespace, which also had a reseller agreement with Nortel Networks. An analyst who knows the industry agreed.

"Ever since Cisco acquired Airspace, Alcatel and Nortel have been talking to everyone," said Craig Mathias, a principal at Farpoint Group, a consultancy specializing in wireless and mobile technologies. "It makes sense. They can't have one of their main competitors also be their supplier."

Neither Alcatel nor Aruba would comment on the deal.

At first, wireless local-area networks based on Wi-Fi, the 802.11 standard, were used mostly in homes to allow multiple computers to use the same broadband connection without running Ethernet cable throughout the house. Now the technology has taken off among businesses that want to allow workers to be more mobile within their offices.

Aruba and several other players, including Airespace, Trapeze Networks and Symbol Technologies, sell products to address this market. Aruba's products are similar to ones from Airespace and Trapeze Networks.

These companies have all taken a centralized approach that uses "smart" switches to control "dumb" radios rather than enabling each radio as a smart device. Aruba and other start-ups claim that by centrally controlling and managing access points, they can expand the network more cost-effectively and provide security such as network authentication.

Alcatel and Aruba seem well-matched to work on developing new voice over Wi-Fi products. Alcatel has sold traditional telephony gear to large corporate customers for years. The company also sells IP telephony products that allow companies to migrate their voice networks onto their Internet Protocol network, which has traditionally been used to carry data traffic.

Aruba's wireless LAN switch is one of the few wireless switches that can identify and classify voice traffic over other forms of IP traffic. As a result, it can give voice packets priority over other data, such as e-mail.