Lucent snags two equipment deals

Lucent's spirits, and stock, lifted by lucrative deals
Written by Margaret Kane, Contributor

Struggling telecom equipment company, Lucent Technologies, signed two major equipment deals on Tuesday, and saw its stock bounce.

Lucent was named as one of the companies supplying wireless equipment to China Unicom for construction of its new network in China. The New Jersey-based company also announced that Global Crossing signed a multimillion deal to be the first to purchase the Lucent WaveStar LambdaRouter, a high-capacity, all-optical switch for communications networks.

Shares were up 43 cents to $10.14 (£7.12), or more than 4 percent, in early trading.

Lucent will begin installing LambdaRouter systems, this month, and expects to complete installation later this year. Specific financial details were not released. The routers will be used in Global Crossing's multicable network, which will run across the Atlantic.

Lucent is one of 10 foreign and Chinese companies that will supply China Unicom in the $1.46bn (£1bn/12.1bn yuan) deal. Motorola, Nortel and Ericsson also won bids.

China Unicom is the second largest mobile phone carrier in China. It has delayed plans to build a CDMA (code division multiple access) network several times.

"I think I've been waiting for this thing for about five years," said Scott Erickson, Lucent's senior vice president for international mobility, shortly after hearing that Lucent had won a contract to provide network gear in Shanghai, Guangdong, Hunan and other provinces.

Lucent's award to supply equipment for networks with a capacity of more than 4 million users, won with its Qingdao joint venture partners, gave it the largest share of the contracts awarded on Tuesday, Erickson said. The dollar value of Lucent's pact was not immediately available.

The first phase of the network will be able to handle up to 15.15 million users, and is expected to be completed by the end of this year, or the beginning of next year.

The deals come at a good time for Lucent, which has suffered significant financial upheaval over the past few months.

Earlier this month, the company replaced its chief financial officer and combined two product divisions as part of a restructuring. It has suffered along with other telecom equipment firms as spending in that sector has dried up.

Lucent has seen its stock dip as low as $5.50 (£3.86)from a 52-week high of $67.19 (£47.23) over the past year. In April, they recorded a $2.7bn (£1.9bn) restructuring charge, and said that revenues from continuing operations for the second quarter dropped 17 percent from a year ago to $5.9bn (£4.1bn).

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