Verizon, Lucent 3G Deal Hits $5B

Verizon Wireless has extended its ongoing contract with
Lucent Technologies by another $4.5 billion to help the
carrier continue building out its 3G data network.

Lucent already has an existing contract for about $525 million worth of
work, which includes Lucent’s hardware, software and services for Verizon’s
3G network, which is based on CDMA2000 1xEV-DO technology.

The latest contract extension, described by officials as lasting for
several years, calls for Lucent to continue as Verizon’s primary
next-generation network infrastructure supplier. In addition, Lucent said it
would provide infrastructure and technology spanning its entire portfolio,
including Bell Labs-developed wireless, optical and data-networking
equipment, as well as network-management and applications software.

Verizon will use Lucent’s Flexent Modular Cell 4.0 base stations,
as it continues expanding its high-speed data service to a nationwide
audience.

Combined with the prior $525 million contract announced in March, the latest
extension brings Lucent’s work for Verizon’s network to just over $5
billion.

During the CTIA Conference in Atlanta last March, Verizon announced plans
to expand its BroadbandAccess data network across the country. Built on
the CDMA2000 1xEV-DO standard, the network is a way for Verizon to provide
next-generation voice, data and video services without having to build out a
new network.

The service, which is going national after a launch in Washington, D.C.,
and San Diego, boasts data transmission speeds of between 300 to 500
kilobits per second, with bursts of up to 2 megabits per second. In
addition to speed, the company said the service is ideal for downloading
complex files, with the ability to download a 1MB e-mail attachment in less
than 20 seconds.

Verizon claims that its standard is faster at some download times than others,
such as GPRS (which is the standard used by rival T-Mobile) or
even the EDGE standard, which is built on the competing GSM
standard.

The deal comes as other providers are racing to upgrade their networks,
including Cingular Wireless, which won the bidding to acquire AT&T Wireless,
which is committed to rolling out 3G in four U.S. markets by year-end. If it
does not, it faces a $6 billion contractual penalty from its investor NTT
DoCoMo.