Lucent Does $230M Deal

Expanding a previous relationship, Lucent will supply $230 million worth of equipment to China Unicom as part of a code division multiple access mobile network build-out.

CDMA is a digital cellular technology that uses spread-spectrum technologies and is the basis for third-generation networks.

China Unicom’s upgrade will improve the coverage of its network as well boost capacity, making it possible to provide video-on-demand, live streaming video and high-speed mobile Internet access to subscribers.

“We have worked with China Unicom for several years deploying wireless systems,” Lucent spokeswoman Mary Lou Ambrus told internetnews.com. “We played a significant role in the first two phases of the deployment of China Unicom’s CDMA network. We announced the first phase in May, 2001 and the second phase in October 2002.”

The contract includes base stations from Lucent’s Flexent Modular cell family, mobile switching centers and related software, Ambrus said.

In a research note to investors this morning, SG Cowen telecom analsyts said they expected Lucent to win substantial contracts for Unicom’s third phase expansion given it past work. They noted however, that the awards this stage was smaller than the $400 million it took during the second phase.

For Lucent though, it marks additional return on its investment in the country.

Earlier this year, the Murray Hill, N.J., company pledged $50 million to upgrade its reseach and development facilities in China with the goal of spurring development of 3G technologies.

Lucent China has eight offices, two Bell Labs branches, four R&D facilities and several subsidiaries and joint ventures. The company employs 3,000 people in China and manufactures a range of network equipment for use there and elsewhere.

Other communications equipment manufacturers also see China as an attractive market, both for for business and research and development. They include Motorola , Hughes Network Systems and USStarcom.