Northern Telecom Ltd. (NTL.TO - news) has won a $590-million contract to
build a wireless telephone network for a new Mexican telecommunications company, the Mexican firm said on Thursday.
Sistemas Profesionales de Comunicacion (SPC) said in a statement it had signed a letter of intent on Wednesday awarding
Nortel the contract to install a wireless network for some two million potential customers in five years.
''Nortel's advanced technology, its support and commitment were key elements in the decision,'' Javier Sarro, the head of
SPC's telephone venture, called Unefon, said in the statement.
The contract, initially valued by SPC at $750 million, was awarded more than a month after the Mexican firm signed another
letter of intent on the deal with Nortel's U.S.-based rival Lucent Technologies (LU - news).
Officials at SPC and Lucent said the deal fell apart due to differences over terms of the contract, but would not provide details.
Mexican newspapers suggested two weeks ago that both sides were at odds over the cost of the contract.
"SPC has notified us that we did not win the contract ....
We were unable to reach a final agreement on terms and conditions of the deal,'' Inge Sengelmann, Lucent's regional director
of corporate communications, told Reuters.
The contract is the clearest sign to date that several U.S.
and Mexican firms plan to use wireless networks as a cheaper way to compete in local telephone service with giant Telefonos
de Mexico SA (Telmex) (TELMEXL.MX).
Telmex lost its long-distance monopoly nearly two years ago, but is still the only provider of local service.
SPC, created early last year by billionaire media and retail magnate Ricardo Salinas Pliego, said Nortel will install the wireless
using Code Division Multiple Access, or CDMA, technology.
SPC also said Unefon had made the first 603 million peso payment of some 2.621 billion pesos it pledged earlier this year to
win government concessions for three wide-band wireless frequencies.
''With these steps, Unefon has taken the first steps to providing in the short-term wireless telephone service to small businesses
and homes, aiming at the lower income level that makes up most Mexicans,'' it said.
News that Nortel had won the contract away from Lucent surprised some local analysts.
''I thought Lucent had it all wrapped up .... Maybe it had to do with differences over price,'' said one analyst who wished to
remain anonymous.
"Both companies are leaders on the technological front ...
so I would guess the decision had less to do with the equipment and more to do on price,'' agreed Alfredo Guillen, an analyst
at Interacciones Brokerage in Mexico City |
