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Technology Stocks : Corvis (CORV) -- Ignore unavailable to you. Want to Upgrade?

To: SemiBull who wrote (320)	7/7/2003 7:53:18 PM
From: SemiBull	Read Replies (1) \| Respond to of 325

Telecom-Gear Firms Bid on Government Pacts Despite Delays Thursday July 3, 12:35 pm ET By Tom Becker NEW YORK -- A possible delay in the awarding of four government contracts valued at between $800 million and $900 million hasn't kept telecommunications- equipment makers from bidding on the project. The Department of Defense is soliciting bids to build its own next-generation optical network using Internet protocol routers. Contract announcements could come in late September, suggesting equipment-vendor revenue from the deals could slip into early 2004, according to a research note published Thursday by Lehman Brothers Inc. (NYSE:LEH - News) analyst Steven D. Levy. The contracts were initially set to be awarded in early September, bringing revenue to the vendors before the end of the year. The awarding of the contracts has been pushed back as the government takes more time to review proposals. More than a dozen companies have contacted the Defense Department and expressed interest in one or more of the four subcontracts, including Ciena Corp. (NasdaqNM:CIEN - News) , Cisco Systems Inc. (NasdaqNM:CSCO - News) , and Nortel Networks Corp. , Mr. Levy said. The equipment manufacturers are hoping to win a portion of the four subcontracts, which Mr. Levy said are valued at $800 million to $900 million over two years. The subcontracts include an optical transport contract, an opt-cross connect contract, an IP router contract and a long-haul contract, the analyst said. The optical transport contract is estimated to be the largest, with a value of between $200 million and $300 million, Mr. Levy said. Potential bidders include Alcatel SA , Ciena, Corvis Corp. (NasdaqSC:CORV - News) , Cisco, Fujitsu Ltd., Innovance Networks Inc., Lucent Technologies Inc. (NYSE:LU - News) , and Nortel. Mr. Levy said the most likely winners are Ciena, Corvis, and Nortel. The opt-cross connect contract is valued between $100 million and $150 million. Potential bidders include Alcatel, Ciena, Corvis, Cisco, Lucent, Nortel, and Sycamore Networks Inc. (NasdaqNM:SCMR - News) . Ciena and Lucent are the probable winners, Mr. Levy said. The IP router contract is valued between $150 million and $200 million. Cisco, Fujitsu, Juniper Networks Inc. (NasdaqNM:JNPR - News) , and Tellabs Inc. (NasdaqNM:TLAB - News) are the potential bidders, according to Mr. Levy. Cisco and Juniper have the edge, Mr. Levy said. "Given its strong competitive positioning in IP routing, we consider Juniper's t-series router can be a strong contestant for the routing subcontract," Mr. Levy said. "We note that within the Cisco-Juniper routing duopoly, the t-640 router may actually be the only commercially available router that meets the stringent high capacity requirements for routers listed (in the contract)." Mr. Levy added that Cisco is in a strong position to win at least part of the IP routing subcontract given the "strength and breadth of its router product line and IP service switch line." The fourth subcontract is the long-haul contract - valued between $150 million and $200 million. Lucent, Cisco, Nortel, Fujitsu, and Alcatel are the probable bidders. Mr. Levy said Lucent, Cisco, and Nortel have the best chance of winning the contract. Mr. Levy doesn't own shares of any of the telecom-equipment companies vying for the contracts. Lehman Brothers or an affiliate may have performed investment-banking services for the companies. -Tom Becker; Dow Jones Newswires; 201-938-2020