Lucent lands billion-dollar Sprint deal
By Ben Charny
Staff Writer, CNET News.com
July 22, 2003, 4:29 PM PT
Lucent Technologies has signed a $1 billion agreement to supply U.S. cell phone company Sprint PCS with network equipment.
Sprint PCS will use the telecommunications gear maker's Flexent CDMA Module Cell 4.0 base stations to increase coverage and voice calling capacity in major markets "from New York to California," Lucent said Tuesday. Lucent, based in Murray Hill, N.J., will also help install the hardware.
The contract, announced Tuesday, is the equipment provider's largest in two years. It last had a $1 billion equipment order, also from Sprint PCS, in January 2001, a Lucent representative said.
The deal comes in the midst of a three-year slump in sales at Lucent and other telecommunications equipment manufacturers, including Nortel Networks and Juniper Networks. The industry, which showed few signs of a turnaround in a flurry of earnings reports this week, has been waiting for carriers like Sprint to begin making large capital expenditures.
The base stations at the heart of Tuesday's deal create cell phone networks based on ever-faster versions of Qualcomm's Code Division Multiple Access (CDMA). CDMA is the dominant cell phone standard in North and South America. The world's most popular cell phone standard is Global System for Mobile Communications, better known as GSM.
[Harry: I am not sure anyone else had a significant presence in this network anyway for wireless given the inter-operability issues. It does not say how many years this contract is spread over. It does indicate the carriers may be reach a saturation threshold though or require new service to charge customers for, Either way, carriers are not spending more right now unless it generates revenue to fall to the bottom line. So as a result, I would guess that they expect a near term pay back. I don't know if Sprint is being aggressive or conservative here though. If conservative it bodes well for an up tick.
JNPR and now TLAB indicate strong North American demand in the quarter than previously. Are the carrier trying to fix hot spots or are they starting a new upgrade cycle. The jury is still out.] |
