Nortel snags $2B commitment from Verizon Wireless

Christmas came a little early for Nortel Networks Ltd. in the form of a $2 billion contract from Verizon Wireless for CDMA equipment and related services as the carrier beefs up its network capacity and footprint in the face of increasing data and video traffic.
While Nortel’s deal with Verizon Wireless doesn’t specifically spell out which products and services Verizon Wireless intends to purchase, Bruce Gustafson, WiMAX marketing director at Nortel, told RCR Wireless News that the contract resembles a gift-card of sorts that can be used for any Nortel services or products, including CDMA2000 base stations, switches, services, optical for backhaul and Internet Protocol Multimedia Subsystems.
Nortel scored a contract with Verizon Wireless in July to supply Verizon Wireless with CDMA 1xEV-DO Revision A technology.
This latest agreement comes amid rising business and consumer adoption of Verizon Wireless’ Vcast video and music services along with its BroadbandAccess high-speed Internet and e-mail offering. In the third quarter, the company reported that data services accounted for 14 percent of its revenue.
“The popularity of Internet services like user-generated videos, online gaming, music and video is driving an explosion in bandwidth demand,” stated Richard Lowe, president of Mobility and Converged Core Networks at Nortel. “Consumers expect more from their mobile devices than voice communication and text-messaging. Nortel is making it simple for Verizon Wireless to expand its network to meet this demand and to competitively drive new services to market that their customers will enjoy.”
For Nortel, the commitment from Verizon Wireless is a huge shot in the arm as the Canadian vendor seeks to move forward after years of executive misconduct allegations that led to financial restatements covering several quarters.
“It’s been a while since we’ve announced a contract of this size,” commented Gustafson. “As we worked through our corporate woes, Nortel’s employees knew that our products were good, and the fact that Verizon stuck with us and continued to purchase our products proves that they trust us to provide them with the best CDMA technology on the market. We have developed a long-term relationship with Verizon. We’ve worked with them to evolve products in a direction that suits their needs and is directly applicable to their network.
“This contract puts a punctuation mark on the end of the year. We’ve turned a corner and we’re moving forward. Our customers have said they trust us.”
Lowe states similar sentiments in Nortel’s press release.
“This contract confirms Nortel’s leadership in supplying innovative CDMA mobile broadband technologies and driving advanced communication services. It’s our long-term partners that know us best, so we’re particularly proud when an industry leader like Verizon Wireless asks us to be part of their team for another five years.”
Verizon Wireless’ Ed Salas, vice president of network planning, summed up the mega-contract as underscoring the carrier’s “focus on investing in innovative technology and leveraging long-term, strategic relationships with leaders like Nortel to continually enhance our subscribers’ mobile communication experience. This means true mobility for our customers, allowing them to take their PC experience with them wherever they go and enjoy things like Vcast Music, Vcast video, great mobile games and high-speed file transfers on the nation’s best wireless network.”