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To: JGoren who wrote (17942)	11/7/1998 12:59:00 AM
From: 2brasil	Read Replies (1) \| Respond to of 152472

----ot AirTouch contract loss based on price - Motorola CHICAGO, Nov 6 (Reuters) - Telecommunications company Motorola Inc. (NYSE:MOT - news) said Friday Airtouch Cellular's (NYSE:ATI - news) decision to use Nortel Networks equipment over Motorola's for expansion of its Los Angeles telecommunications network was based on price and not based on performance or reliability issues. Airtouch, the largest wireless company in the world, said it agreed to buy digital network infrastructure for its Los Angeles market from Nortel Networks. A letter of intent between the two companies covers the multi-year purchase of state-of the-art network switches, base stations and controllers. ''This was not an issue of system performance or system reliability,'' said Scott Weiman, spokesman for Motorola's cellular infrastructure group. ''It was a pricing issue,'' he told Reuters in a telephone interview. Currently, Airtouch's Los Angeles network uses only Motorola equipment and Airtouch will remove this equipment and reinstall it in other markets, said AirTouch spokeswoman April Walden. While granting the contract to Nortel Networks, AirTouch said it remains committed to Motorola, which still provides hundreds of millions of dollars in equipment for about 40 percent of AirTouch's cellular networks in the United States. ''We have a solid relationship with Motorola and will continue to rely on their products to support other cellular networks as well as our paging and handset needs,'' said Mike Polosky, executive vice president, network systems at AirTouch. CDMA (code division multiple access) has become very price competitive, Motorola's Weiman said. ''I can assure you we are today and will continue to be the most cost effective provider for CDMA and other digital analog technologies,'' he said. Christopher Montano, telecommunications analyst at San Francisco-based investment bank Hambrecht & Quest said, ''CDMA is becoming more competitive and this is indicative of future challenges Motorola will face to win contracts.'' Motorola has been struggling on the infrastructure side of the business, analysts have said. ''We view these losses as blows to Motorola,'' said Brian Modoff, analyst at BT Alex Brown. ''Motorola has made progress in handsets but has yet to come up with a plan to turn this division around. This is definitely an indication that they are still struggling with that area,'' he said. AirTouch's Walden said the company is looking to finalize the letter of intent with Nortel Networks within a month and will not, until that time, disclose the value of the contract. AirTouch owns interests in cellular, paging, and personal communications services in the United States and 12 other countries and has an interest in the Globalstar satellite system. Nortel Networks, a unit of Northern Telecom Ltd. (Toronto:NTL.TO - news), designs and builds telecommunications networks for companies, Internet service providers, local, long-distance, cellular and cable television carriers and utilities. More Quotes and News: Airtouch Communications Inc (NYSE:ATI - news) Motorola Inc (NYSE:MOT - news) Northern Telecom Ltd (Toronto:NTL.TO - news) Related News Categories: US Market News biz.yahoo.com