Optus, Nokia strike $900 Million 3G Deal

Amidst the changeover of its parentage, Cable & Wireless Optus has unveiled
its plans to deliver Australia’s first 3G network, announcing a $900 million
infrastructure deal with Nokia to realise this vision.

Optus’ investment will cover both 2G and 3G equipment, spending which the
managing director for mobile, Paul O’Sullivan, said was in step with what the company
currently spends on its network. “(The deal) represents great value, especially
because all our new base stations will be 3G capable,” he said.

The seven year agreement covers the supply of the 3G Radio Access Network
for both WCDMA and EDGE, as well as the complete 3G circuit and Packet Core
Network, to help deliver Optus’ 3G services. Nokia, which has 25 per cent of
its business in networks, will provide the infrastructure and applications,
security and network management, as well as its UltraSite base station which
Nokia has already started delivering. The new service’s mobile packet core
will evolve from the Nokia General Packet Radio Switch (GPRS) core that
Optus currently employs.

Optus expects to be prepared for when the 3G spectrum, the auction for
which it recently won, is cleared for use late in 2002. More than 20 3G
networks are expected to be rolled out globally by that time, however
O’Sullivan said Optus intends to learn from these overseas experiences in
planning the size and scale of its own domestic rollout.

“The deal will enable Optus to combine the power of mobility and the
Internet and build on their existing business to rapidly create new
services,” said Kevin Brough, managing director of Nokia Networks
Pacific.

Under the deal, Nokia will commit to 3G applications development as well as
to its driving infrastructure, through a joint mobile Internet applications
lab called FutureLab. This center will develop products and services for
future telecommunications systems.

“FutureLab will give Australian software developers access to the latest in
3G developments worldwide and help local designers get their applications to
market,” said O’Sullivan.

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