Nortel, BLU Sign GSM Deal with Eye to Wireless Internet

Nortel Networks and
BLU S.p.A. Monday inked a $138 million deal with wireless Internet written all over it.

The two will create a nationwide digital
wireless network in Italy, where BLU is currently the fourth largest GSM
operator, in an agreement said to be worth $138 million over 18 months.

As a result of the deal, BLU will be able to exploit what is being
hailed in Europe as the “Wireless Internet revolution” — the move
to wireless-based Internet applications using new protocols to
enable high-speed data transmission to mobile devices.

Matt Desch, president, Service Provider Solutions for Nortel
Networks in Europe and Asia, said that winning the contract gave
his company a strong foothold in a very important market.

“BLU will soon be able to give Italians access to a high-performance
Wireless Internet, ready to provide a wide range of exciting
multimedia services,” said Desch.

The contract with BLU includes a turnkey GSM 1800 network
with a packet-based, IP (Internet Protocol) backbone.
Eventually the network will evolve to General Packet Radio
Service (GPRS) and Universal Mobile Telephone Service (UMTS),
the two protocols that will spearhead the move to high-speed

The two largest shareholders in BLU, a relative newcomer
to mobile operations in Italy, are Autostrade with 32 per cent
and BT with 20 per cent.

Several hurdles still have to be overcome before the shareholders
can reap the rewards of Internet-based mobile services in Italy.

BLU and Nortel Networks now have to deploy the GSM 1800 network,
and integrate it with third generation UMTS systems. BLU will also
need to acquire a license to operate services using the new protocols.

If all goes well, say BLU and Nortel Networks, the deal between them
could be worth $500 million over five years to Nortel, which is
concentrating extensive resources on developing wireless solutions
for the Internet.

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