Verizon Wireless, the No. 1 US wireless telephone company, on Monday awarded a three-year, $5 billion contract to telecommunications equipment maker Lucent Technologies for gear the will increase the capacity of Verizon`s wireless network.
The deal, designed to speed Verizon`s introduction of next-generation services, will make Lucent the largest supplier of high-speed, high-capacity wireless infrastructure to Verizon Wireless, a joint venture of Verizon Communications and Britain`s Vodafone Group. Lucent will now supply 65% of Verizon Wireless` network.
The contract marked a significant win for Lucent, which has been struggling over the past year with massive losses, product development problems and manufacturing constraints. Lucent edged out other vendors, such as Nortel Networks, which already provides some wireless equipment to Verizon.
Shares of Lucent jumped $1.98, or nearly 20%, to close at $11.97 on the New York Stock Exchange. Shares of Verizon gained $1.55, or 3.27%, to close at $48.88, also on the NYSE.
With Lucent`s products, services and software, Verizon Wireless will introduce high-speed mobile Internet services without substantial additional investment in new base stations, the companies said.
Verizon Wireless, which has 27.5 million wireless voice and data customers, will begin to deploy the first phase of this third-generation technology in its coast-to-coast network later this year. So-called third-generation networks will require high-speed data-networking systems to support wireless Internet and video services.
This upgrade could double the existing network`s voice capacity and increase data-transmission speeds by nearly 10 times.
Verizon Wireless will begin to deploy its first phase of third-generation technology in its coast-to-coast network later this year.
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