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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: Jack Hartmann who wrote (13765)	3/3/2000 8:43:00 AM
From: Bipin Prasad	Respond to of 21876

from cnnfn; Lucent in China deal Telecom equipment provider wins contracts worth over $100M March 03, 2000: 6:17 a.m. ET BEIJING (Reuters) - Lucent Technologies Inc., the world's largest telecommunications equipment maker, said Friday it had won contracts worth more than $100 million from several Chinese service providers. The contracts reflect a rush by Chinese telecom operators to roll out state-of-the-art networks ahead of foreign competition once Beijing enters the World Trade Organization, said Gerry Butters, chief strategist of Lucent. Under an agreement reached with the United States last year, China has pledged to open the sector gradually to foreign competition once it gains WTO membership, expected this year. "What we've seen since the WTO agreement is a rush for cyber technology in China," Butters told Reuters in an interview. "That's the best of current generation wireless, new communications software and broadband data network equipment." China's markets for wireless, optical fiber and data communications networks would "grow by double-digit rates and in some cases triple-digit rates," he said. The Lucent deals are spread between all three of China's major operators -- demonstrating how domestic competition has heated up since the government began restructuring the sector last year. Terms of deals About 60 percent of the value of the contracts comes from China Unicom, the country's No. 2 two telecom provider. They include an expansion of a GSM mobile phone system in the northeastern province of Liaoning, an expansion of optical networks and the introduction of advanced Asynchronous Transfer Mode (ATM) technology to Unicom's national backbone network, Butters said. ATM technology allows phone lines to carry sophisticated Internet services, including voice. Most of the other contracts were split between China Telecom, the leading state company in China, and China Network Communications Corp, the newest national company. The China Telecom contract is for Lucent to build an optical network in Beijing with a 10 gigabit-per-second capacity. "It's the fastest of its kind in a city network," he said. China Netcom Corp awarded Lucent a contract to sell equipment for its high-speed backbone currently under development. In a smaller, but politically significant deal, the State Administration of Radio, Film and Television approved the sale of equipment to upgrade the digital video backbones of Chinese cable television systems. Cable companies are barred from offering data and Internet services under a regulation issued last year aimed at separating the telephone and cable industries' core businesses. But the deal indicates how cable companies are rolling out infrastructure capable of such services in spite of those rules. Big market in china Butters said the ATM contract with Unicom would not have been possible without Lucent's $24 billion acquisition last year of Ascend Communications Inc., the No. 4 U.S. data networking company, which gave it the technology. It was one of a rash of mergers in the sector. Nortel Networks (NT: Research, Estimates) bought Bay Networks in 1998, and Alcatel bought Newbridge Networks Corp. in a $7.1 billion deal last year. "The consolidation is being driven by the competitive threat from Cisco," Butters said. Another Lucent official suggested a Chinese government freeze on CDMA technology would be temporary. "We anticipate the project will go forward in the future," said Chi-Ho Lin, head of Lucent's(LU: Research, Estimates) China wireless operations. He said China Unicom wrapped up a round of talks last week on Lucent's bid to sell CDMA equipment, but declined to say when they would resume. Talks between other companies have also been frozen, and an MII official last week said CDMA had been "suspended" because China Unicom had not completed procedures. But Lin said: "We haven't received anything official about a delay of the whole CDMA process." Lucent shares closed Thursday at 71-3/4, up 3-1/8.