Re: NT and AT&T's HFCs Plans
Ken & Thread,
Now this is the kind of news I like to read. More spending by AT&T for last mile investors.
Looks like NT's strong push into the data space(via BAY) made them high on the list for AT&T's two-way HFC upgrade plans for TCI's cable plant. Does anybody know if the DMS-500 switches were always part of the NT portfolio of products or are they something BAY brought in? I'm just guessing it was a Bay Networks product.
I'm not so sure about the VoIP comments the reporter made? I guess in reality the reporter isn't saying much by using the word, "testing."
It's a good thing AT&T has ready access to capital. If my memory serves me correct, I believe AT&T did a MAJOR bond offering not to long ago and got a pretty good rate to borrow at.
MikeM(From Florida)
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Nortel Wins AT&T Equipment Order for Up to $350 Mln
Brampton, Ontario, May 13 (Bloomberg) -- Nortel Networks Corp., the No. 2 phone equipment maker in North America, was awarded a contract by AT&T Corp. for as much as US$350 million in local-telephone equipment, beating out rival Lucent Technologies Inc., people familiar with the order said.
AT&T, the No. 1 U.S. long-distance company, will buy $100 million of switches this year and is likely to purchase as much as $250 million more by the end of 2000, the people said. The company will use the switches in the cable-television network it purchased by acquiring Tele-Communications Inc. AT&T and Nortel, based in Brampton, Ontario, near Toronto, declined to comment.
AT&T is updating the cable-TV network to provide local-phone services, letting the company compete with Bell Atlantic Corp. and others. The order is a breakthrough for Nortel, since New York-based AT&T previously bought all its switches from Lucent, a former unit and the world's biggest phone-equipment maker. ''Every contact win they (Nortel) get with AT&T is very significant,'' said TD Securities Inc. analyst Paul Litva, who rates Nortel a ''buy.'' AT&T's equipment budget is $11 billion to $12 billion this year.
AT&T's push into local service opens up another sales avenue for Nortel, analysts said. TCI, acquired by AT&T in March, agreed in February to buy as much as $900 million of equipment from Arris Interactive LLC, a joint venture in which Nortel owns a majority stake. ''There's a lot of potential at AT&T,'' said Litva. ''AT&T spends a lot of money and Nortel has never really had access to it.''
AT&T also is testing new equipment from Nortel that helps move data traffic over voice networks and gives data networks sophisticated voice features.
The New York-based company is expected to buy as many as 33 DMS-500 switches, which sell for about US$10 million each, under the agreement with Nortel. Lucent, the Murray Hill, New Jersey- based unit that AT&T spun off in 1996, declined to say whether it bid on the AT&T contract. ''We continue to do well with our business with AT&T,'' said Lucent spokesman Bill Price.
AT&T bought US$3.78 billion of Lucent equipment in the fiscal year ended June 30, 1998.
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