Lucent, Verizon Bet $5 Billion on 3G
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Lucent Technologies and Verizon Wireless inked a $5 billion pact Monday to propel the delivery of next-generation (3G) high-speed mobile Internet services.
As part of the three-year deal, Lucent, based in Murray Hill, N.J., will provide equipment designed to double Verizon's voice capacity and boost its wireless transmission rates by as much as 10 times the current speed.
The partnership has significant impact on the wireless market as well as breathes new life into Lucent, which has had its share of financial woes lately.
"This an excellent deal for both Lucent and Verizon," Francesca Mabarak, senior analyst, wireless/moble, The Yankee Group, told internetnews.com. "Although Lucent is an excellent infrastructure player, the company lacked a business plan in the wireless arena," she said. "This gives Lucent the jump start it needed in the company of a decent brand name. By uniting the two companies, Verizon has access to a lot of technology that allows for high speed data rates.
The partnership will dually allow new and different wireless applications to come to the fore, according to Mary Ward, a spokesperson for Lucent. "For instance, streaming video, which requires massive amounts of data, will be the sort of application that can be achieved with the new technology," she said.
The technology, known as 3G1XRTT, is expected to begin initial deployment later this year. The technology is designed around a wireless transmission standard called CDMA 2000.
"When the high-speed data-networking session is put into effect, more wireless applications will become available to the marketplace," Ward told internetnews.com.
In related news Sprint, last week, revealed plans to unveil a similar service by the end of the year. It will be interesting to see carrier emerges as victor in the 3G marketplace relay.
It's going to be a horse race, agreed Lucent Spokesperson Sam Gronner. "We are working with both companies to help them meet their goals. Verizon is a very well established company that has gone digital. Spring was digital from day one, which gives them a competitive advantage. Our job is to make sure both companies get there when they want to. The best thing we can do is to get our customers up and running."
Today's announcement makes Lucent the largest supplier of New York City-based Verizon's 3G mobile infrastructure.
At press time, Lucent
was trading at 9.99, down by
, was down by trading at 46.950, a .380
decrease. Sprint PCS
stood at 21.74, down by 0.01.