Lucent Technologies Inc. reinforced its CDMA profile and its place in the heart of Verizon Wireless with a whopping $5 billion contract with the biggest wireless carrier in the United States.
The deal, which replaces its agreement in March 2001, jolted the vendor’s stock upward by 3.85 percent to $3.51. The expired contract also was valued at $5 billion. Both companies said the new agreement includes the $525 million contract announced in March, which named Lucent as a key supplier for Verizon’s BroadbandAccess high-speed data network.
“With this agreement, Lucent will continue as Verizon Wireless’ primary next-generation network infrastructure supplier,” said both companies.
“For Lucent, it’s a tremendous opportunity,” remarked Michael Grossi, principal at consulting firm Adventis. “For Verizon, it is a necessary step. Verizon has historically prided itself on its quality and reach of its networks.”
He said Lucent will see this as an opportunity to make inroads to Sprint, which will announce a deal of the same scope.
He explained the deal provides a chance for Lucent to demonstrate their equipment and engineering.
Under the deal, Lucent will supply equipment, software and services to Verizon’s CDMA2000 1x EV-DO network.
The carrier believes the deal will enable it provide voice, data and video services in the future while preserving its investments in its existing network.
Verizon has launched its EV-DO services nationwide and has signed deals with other vendors, including Nortel Networks Ltd.
EV-DO provides only data services, but it is backward compatible with 1x, which provides both voice and data.
“At Verizon Wireless, we’re focused on our growing customer base and ensuring that they have the highest quality products and services,” said Dick Lynch, executive vice president and chief technical officer for Verizon Wireless. “Lucent has long been a key supplier and has helped us provide our customers the most satisfying wireless experience possible.”
Lucent said it provides the products and technology that will cover not only wireless, but also optical and data networking equipment. Verizon said it will also participate in the Lucent Market Advantage Program, which will help the carrier in providing such high-speed services as corporate Internet and intranet access and downloading of video and PowerPoint files to both enterprise and residential customers.
