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Lucent Wins $1B Sprint Contract

One week after poor mobile gear sales clouded Lucent's financial picture, the telecom equipment maker has rebounded with a $1 billion deal in the sector.

The Murray Hill, N.J., company will supply advanced networking equipment to Sprint under a multi-year deal announced this afternoon.

The gear -- which includes base stations, switches and software -- will improve Sprint's third-generation network that covers major U.S. markets. Installation, integration and remote technical support will come from Lucent Worldwide Services, the firm's consulting arm.

"It's a big win given the context of what's been going on in the industry and with Lucent," Lucent spokeswoman Debra Lewis told internetnews.com.

Lewis said it's Lucent's first billion-dollar deal since June of 2001.

Last week, Lucent warned it would lose 6 cents to 8 cents per share on revenues of about $1.97 billion in the third quarter (an 18 percent drop in revenues compared to the second-quarter).

The company also pushed its profitability point into 2004 (previously, Lucent expected the milestone by the end of this year).

Lewis declined to say whether the new Sprint deal will change those projections. More details about the financial impact will be discussed during Lucent's quarterly conference call tomorrow, she said.

Sprint has been a Lucent customer since 1996. Its network is based on code division multiple access technology, which enables it to add advanced mobile data services and increases in voice capacity.

The new equipment will increase coverage and capacity, and help Sprint offer new data services -- key to improving the carrier's average revenue per user, or ARPU, a key industry measure.

Sprint, based in Overland, Kan., appears to be loosening its purse strings. Yesterday, the company announced an initiative to have support more than 2,000 public Wi-Fi access points in the United States.

Lucent's Lewis would not speculate that service providers were poised to begin major network upgrades after more than two years of delaying or canceling projects because of the economy.