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Technology Stocks : Lucent Technologies (LU)
LU 2.835-1.9%2:00 PM EST
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To: William Hunt who wrote (8267)6/24/1999 8:59:00 PM
From: Mr.Fun  Read Replies (1) of 21876
 
While I like NT, this "contract" is not what it seems:

1) BellSouth like all of the RBOCs is a significant customer of both NT and LU.

2) This agreement for "$5billion over 10 years", or $500 million a year, is about what BellSouth spends with NT each year anyway and less than it spends with LU.

3) This "contract" does not commit BellSouth to buy anything, rather it sets a schedule of discounts across NTs entire product line based on certain sales targets.

4) As such, this "contract" is in fact an agreement to provide significant discounts on a volume of orders that they might have won anyway.

5) Level3 is an extraordinary contract - a new customer from a category where LU has had little presence and a new product that is a year ahead of the competition with a potential of billions of dollars a year. I'd say Rich deserves a little back patting.
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