Nortel wins Spanish 3G deal, says more to follow
By Susan Taylor
OTTAWA, Sept 7 (Reuters) - Nortel Networks Corp. <NT.N> <NT.TO>, the world's No. 2 telecoms network equipment supplier, said it expects further wireless deals in Europe to follow a Spanish contract worth about $100 million that it announced on Thursday.
Nortel said it will deliver a range of 3G, or third generation, wireless equipment to Airtel Movil SA, Spain's second-largest wireless carrier, under a 12-month supply deal.
Airtel will use the technology to deliver information, e-mail, video and electronic business services.
"Odds are good that Nortel will announce more wins in different countries in Europe, including possibly Spain," said Anil Khatod, Nortel's president of Internet business.
"Right now, in the majority of the decisions across Europe, Nortel is (on the) short list -- either No. 1 or No. 2."
Spain is an early adopter of 3G technology, which uses the Universal Mobile Telecommunications System (UMTS). The Spanish government, which has awarded 3G licenses to three other carriers, has mandated the launch of services by 2001.
A string of other European countries are now preparing to auction off 3G licenses by year's end, following multi-billion-dollar bidding wars in Britain and Germany.
About 60 European licenses will be awarded within the next year, worth an estimated $120 billion to $150 billion, said Nortel, citing industry analysts. The company also said that analysts peg the European wireless equipment market at $36 billion by 2003.
"I think they're gaining share in wireless and I think that they're going to continue to -- I think that they're going to see some pretty solid and sizable incremental contracts, particularly out of Europe," said Alex Henderson, a Solomon Smith Barney analyst who follows Nortel. "I think that this is going to continue to be a real success story for them."
Nortel, which struck a $700 million, three-year 3G wireless supply deal with British Telecommunications Plc's <BT.L> wireless division BT Cellnet in May, said it expects to soon announce more contracts.
Brampton, Ontario-based Nortel faces competition from such established European companies as Sweden's Ericsson <LMEb.ST>, the world's No. 1 wireless equipment vendor, Finland's Nokia Corp. <NOK.N>, and France's Alcatel <CGEP.PA>.
North American competitors include Lucent Technologies Inc. <LU.N> and Motorola Inc. <MOT.N>
"We see the wireless Internet as a...huge opportunity for Nortel to grow and improve its market position," Nortel chief executive John Roth told Reuters in a recent interview.
"There's a whole bunch of companies that are grouped around No. 2 and we're in that grouping -- we want to bust out of that and this is a chance we think to really go after No. 1."
One of Nortel's key advantage lies in its wide range of network equipment, said Khatod, which extends from wireless technology that connects with customers and base stations to the high-capacity fiber-optic networks that can deliver large streams of voice, data and video traffic.
($1=$1.48 Canadian)
16:55 09-07-00
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