Lucent signs $5 billion 3G deal with Verizon

Lucent Monday announced a 3-year, $5 billion deal with Verizon Wireless to supply third-generation mobile telephony equipment.

Verizon, which is the largest mobile operator in the U.S., will start deploying the technology that allows high-speed wireless data transmission later this year, the companies said in a joint statement.

Verizon has agreed to buy multiple products and services from Lucent. The operator said it would upgrade its existing voice network to the CDMA2000 - Code Division Multiple Access - standard. The companies expect the 3G introduction to be the first commercial launch in the U.S.

"We are upgrading from cdmaOne to CDMA2000, that means swapping circuit cards and updating software. The first phase, getting network speed up to 144K bit/sec will be done this year. The second step in 2002 will get us up to 2M bit/sec," said Andrea Linskey, spokeswoman for Verizon, adding that Lucent currently supplies about 65% of Verizon's network with Nortel Networks and Motorola being the other suppliers.

"We are not building a network for Verizon, but helping them expand and enhance the existing network," Lucent spokeswoman Mary Ward said. "It does position us to become the largest supplier to Verizon."

For embattled Lucent the deal - according to Ward the largest wireless deal in the company's history - has come at a critical time. The telecom equipment vendor is carrying out a broad restructuring plan and managed to settle short-term liquidity problems late February with a $6.5 billion credit line.

"This is a vote of confidence for Lucent. It demonstrates that customers are still looking to Lucent for the technology they need as they bring out new services," Ward said.

Verizon said it has 27.5 million customers. The company was formed by the combination of the U.S. wireless businesses of Bell Atlantic, GTE and Vodafone Group PLC.

Verizon Wireless, in Dallas, is at http://www.verizonwireless.com/. Lucent, in Murray Hill, N.J., is at www.lucent.com/.

The IDG News Service is a Network World affiliate.