09:49 AM ET 10/22/98
Lucent lands $2 bln contract from WinStar
NEW YORK, Oct 22 (Reuters) - Telecommunications equipment
maker Lucent Technologies Inc. said Thursday it landed a
five-year, $2 billion contract to build WinStar Communications
Inc.'s fixed wireless broadband telecommunications network.
WinStar provides local and long distance phone service,
Internet access and high-speed data services using radio
spectrum instead of traditional copper or fiber optic networks.
Lucent said it will provide WinStar with equipment,
software, support services and financing.
Lucent said the WinStar deal is one of its largest
contracts with a competitive local exchange carrier, a
fast-growing market niche. The deal expands on Lucent's
existing four-year relationship with WinStar.
Over the five-year agreement, Lucent will provide WinStar
with up to $2 billion in financing for the equipment. WinStar
may draw upon this financing in tranches not to exceed $500
million at any one time. Lucent is not taking an equity stake
in WinStar.
The deal allows WinStar, which was already fully funded to
complete its 40 market buildout by the end of 1999, to complete
the national deployment of its wireless broadband network ahead
of schedule. These resources will also enable WinStar to
increase the number of U.S. cities to which it will bring its
network, and to build networks internationally.
"WinStar was already fully financed to build out its 40
city plan and achieve positive EBITDA by the year 2000," said
WinStar Chairman William Rouhana.
"We are now at a new level, with enough capital to achieve
positive net income and control over when we build out our
network in up to 100 cities around the world. We now have the
opportunity to aggressively plan for our expansion into the top
50 domestic markets and into the international marketplace as
well," Rouhana said.
Separately, Murray Hill, N.J.-based Lucent reported
better-than-expected fourth quarter earnings and ended its
money-losing joint venture with Holland's Philips Electronics
NV .
(( Jessica Hall, New York newsroom 212-859-1729)) |
