qdog,
The Lucent/Ameritech contract means serious money--$1 billion--and some of it has got to come the Q way....don't you think?
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Tuesday August 5 1:56 PM EDT
Lucent -Ameritech pact valued at over $1 bln
NEW YORK, Aug 5 (Reuter) - Lucent Technologies Inc's wireless equipment contract with Ameritech Corp (AIT) is a major win for the equipment supplier 7/8 ``This is one of the largest wireless equipment deals ever,'' said Hambrecht & Quist analyst Joe Noel. ``It's worth at least $700 million over five years and could even be over a billion,'' Noel said. He holds a buy rating on Lucent stock.
``Lucent is simply knocking the cover off the ball on the wireless side,'' Noel said.
In a statement, the companies said the supply contract calls for Lucent to provide phone switches, wireless base stations and related hardware, software, installation and engineering services for
Ameritech's digital wireless network.
Specific financial details of the contract were not disclosed. Spokesman for both companies declined to comment on the value of the deal, other than to repeat the statement's description that the
pact represented ``a five-year, multi-million dollar contract.''
Under the deal, Lucent would be Ameritech's exclusive wireless equipment supplier, the companies said.
At the end of June, Ameritech served 2.9 million cellular subscribers in six states of the Midwest, a spokeswoman said.
The Lucent equipment will be used to construct a digital overlay network that sits on top of Ameritech's existing cellular network, which is based on older, analog technology.
In two metropolitan regions -- Cleveland and Indianapolis -- the Lucent equipment will be used to construct from the ground up entirely new digital networks to offer the latest generation of so-called
Personal Communications Services.
Chris Landis, an analyst with industry consulting firm TeleChoice Inc based in Verona, N.J., also estimated the deal as ranging in value from hundreds of millions of dollars up to ``close to a billion''
over the life of the deal.
He said the deal was similar to U S West Communications Group's(USW - news) $500 million pact with Lucent for digital wireless networks over a 14-state region, a contract that could run as high as $1 billion as construction is completed.
Lucent's exclusive contract is rare in an industry where phone companies typically prefer to deal with multiple equipment vendors, Hambrecht's Noel said.
``Ameritech probably got some aggressive pricing out of Lucent'' Noel said, considering the deal's scale and exclusive nature.
Lucent had been Ameritech's primary wireless equipment provider for several years, along with Motorola Inc (MOT), a spokesman said. Lucent will supply wireless network equipment based on Code Division Mutliple Access standards, she said.
Lucent stock was up 1-1/4 to 85-15/16 in mid-afternoon trading on Tuesday.
Commenting on the lack of a more significant gain in the stock following the Ameritech deal, Noel said Lucent's stock price is ``pretty expensive at $85'' considering that it traded at 35 earlier in the year.
``The expectation among investors is that Lucent is going to walk away with the majority of these wireless deals, so the stock action isn't that great,'' Noel said.
More news for referenced ticker symbols: AIT, LU, MOT, USW, and related categories and industries: Semiconductor, Computer-Telecom, computer, telecommunications, stock capsules,
treasury.
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Ibexx |
