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Mixed News From Lucent's Overseas Operations

Reinforcing its multi-vendor support strategy, Lucent's services arm announced a multi-year, multi-million-dollar contract with Deutsche Telekom's systems division today.

The Murray Hill, N.J., firm will maintain T-Systems' Internet Protocol-based virtual private network and Multiprotocol Label Switching networks.

Lucent will also remotely monitor, repair and exchange components of the IP network worldwide as well as provide technical troubleshooting and software updates for the Bonn, Germany, company.

The pact is significant because it involves support of rival's components. Previously, Lucent only maintained systems built on its own gear, a practice that restricted the number of jobs they could compete for.

"Over the last 18 months we've made a considerable shift toward multi-vendor networks," Lucent spokesman Stephen Loudermilk told internetnews.com.

Today, more than 30 percent of Lucent's customer deployments and 20 percent of its services revenue come from multi-vendor business. In addition, Lucent's multi-vendor networking experience spans more than 120 vendors and 470 different products.

Compared to network equipment orders, which are one-shot deals, the services business provides stable, predictable revenues, something Lucent welcomes after the telecom boom and bust cycle of the last few years.

In less positive news from Lucent's overseas business, the company has found "incidents and internal control deficiencies" in its China operations that could involve violations of the Foreign Corrupt Practices Act. The FCPA prohibits bribery of foreign officials to win work.

Lucent has fired four people in its China group including the president, COO, a marketing executive and a finance manager, according to a filing with the Securities and Exchange Commission yesterday. It did not give details on the alleged violations.

Lucent does not expect the incident to materially impact its financial results. It cautioned, however, that it can't say what impact it may have on its future operations in China, which it considers ripe for telecom equipment and services.

Lucent China has eight regional offices, two Bell Labs branches, four R&D facilities and a number of joint ventures and wholly owned enterprises. Currently, the company has approximately 3,000 employees in China and manufactures a range of network equipment for use there as well as around the world.

Previously, the company reported similar potential problems in its Saudi Arabia offices. A U.S. government investigation is still ongoing in that matter.