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WinStar Tells Hughes, P-Com to Prepare for Big Wireless Order
New York, Sept. 15 (Bloomberg) -- WinStar Communications Inc., which provides phone service and Internet access to businesses, told Hughes Electronics Corp. and P-Com Inc. to get ready to supply large amounts of wireless equipment for a high- speed network it's building.
The company hasn't yet placed any orders and may instead buy equipment from Nortel Networks Corp. or Lucent Technologies Inc., said WinStar Senior Vice President of Strategic Planning Bill Vogel. It's looking for enough gear to install for several years starting in the fourth quarter. P-Com makes equipment in a joint venture with Siemens AG of Germany.
WinStar is moving to a new fixed-wireless standard that delivers information to multiple buildings from a single radio instead of to just one location. It asked 20 companies to submit bids on the necessary equipment four years ago and has since whittled the candidates down to four.
''The front-runners in this beauty contest are Hughes and P-Com with Siemens,'' Vogel said. ''We've given them preliminary indications for volume orders.''
P-Com shares soared 1 9/32, or 21 percent, to 7 9/32 on speculation that it won a contract from WinStar. Hughes, a unit of General Motors Corp., rose 15/16 to 55 3/4. WinStar fell 2 3/4 to 53.
First Orders
WinStar's first orders probably will total about $100 million in equipment based on the new standard, known as point to multipoint, analysts said. Until now, the company has been using older technology called point to point.
''The hope is that point to multipoint will decrease their cost per building,'' said PaineWebber Inc. analyst John Hudelik. ''They're buying this equipment largely because there's a tremendous advantage to being the first fixed wireless provider in a building.''
Vogel said the decision whether to use Nortel or Lucent equipment will depend on how aggressive they are with financing. So far, only Hughes and P-Com have demonstrated gear fast enough to meet WinStar's needs. Vogel said the New York-based company plans to use two or three equipment suppliers.
P-Com has been WinStar's No. 1 supplier of radios and antennas for point-to-point communications for the past few years. P-Com, whose revenue has fallen for the past two quarters, had sales of $195 million last year.
Campbell, California-based P-Com designed its point-to- multipoint system together with Siemens. Vogel said WinStar also likes what El Segundo, California-based Hughes developed.
''Their equipment is basically declassified military stuff,'' he said. ''We're really excited about what they've got.''
Sep/15/1999 19:50
Dave |
