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To: kech who wrote (12011)	7/3/1998 3:29:00 PM
From: Sawtooth	Read Replies (2) \| Respond to of 152472

A little more detail on the NT Mexico deal. LU was originally awarded the deal. Questions linger about just exactly what precipitated the deal shifting over to NT. ...Tim Friday July 3, 2:09 pm Eastern Time Nortel shares ride Mexican deal higher TORONTO, July 3 (Reuters) - Northern Telecom Ltd. (NT - news) stock rose on Friday after the communications equipment maker beat out Lucent Technologies Inc. (LU - news) to win a $590 million deal to build a wireless phone network in part of Mexico. On the Toronto Stock Exchange, the stock rose C$2.10 or 2.5 percent to C$84.75 on turnover of more than 280,000 shares. There was no trading in New York due to a market holiday ahead of Independence Day on Saturday. Mexico's Sistemas Profesionales de Comunicacion said on Thursday it had signed a letter of intent awarding Nortel a contract to install a wireless network for about two million potential customers. The Mexican firm had earlier priced the deal at $750 million, and a month ago unveiled a letter of intent to award the contract to Nortel's U.S.-based rival Lucent. Analysts wondered if Lucent had walked away from the deal and how Brampton, Ontario-based Nortel had taken over. ''They (Nortel) need that sort of business to maintain their growth, but it certainly is affirmation of their strength in wireless,'' said John Drolet, Yorkton Securities analyst. ''What we don't know are details of the deal. How much, what was the pricing like ... and why didn't Lucent fight harder? Those are all questions that remain unanswered.'' Tom Astle, analyst at Midland Walwyn, said Nortel might have nipped in with a lower price. ''There's speculation that Nortel's undercutting on pricing,'' he said. ''Nortel typically has run their wireless business on a lower margin than Lucent, so that they can offer lower pricing without impacting the financials as strongly as Lucent would,'' he added. But there is such a large discrepancy in pricing that it points to signs the terms were likely downsized as well, Astle said. Overall, the deal is a win for Nortel, analysts agreed. ''It's quite a sizable contract, Nortel hasn't had a wireless order of this magnitude for (a while),'' Astle noted. ''It's nice to be taking this from Lucent.''