Cingular Confirms Lucent Deal

Cingular confirmed late Tuesday that it will award some $4 billion in network upgrade contracts to Ericsson (ERICY Quote), Lucent (LU Quote) and Siemens (SI Quote).

News of the big wireless service provider's decision comes just two weeks after TheStreet.com predicted the company would name those three telecom gear giants as partners for Cingular's latest push to lead the wireless data business.

While the deal is certainly a positive for Ericsson and Siemens, it's seen as a major victory for Lucent, which has been largely on the sidelines in markets outside the code division multiple access, or CDMA, arena.

The big losers in the deal are Nortel (NT Quote) and Nokia (NOK Quote). Both vendors have been suppliers to Cingular and AT&T Wireless in the past and were considered to be in the running for Tuesday's award of universal mobile telecommunications system, or UMTS, upgrade contracts.

Cingular says it will start working on upgrades in several major markets next year, but didn't name any cities. The company is expected to target laptop users initially with wireless access cards. Cingular says the first UMTS handsets won't be available until late 2006.

Cingular, the largest U.S. cell-phone service provider, is locked in a data-networking arms race with rivals Verizon Wireless and Sprint (FON Quote). The company is anxious to bolster its standing by offering customers faster wireless Internet connections.

UMTS is third-generation, or 3G, gear that promises wireless users Internet connections at speeds that rival digital subscriber lines, or DSL. UMTS is a technology approach favored by many of the GSM-based carriers.

Opponents like Sprint and Verizon Wireless -- a joint venture of Verizon (VZ Quote) and Vodafone (VOD Quote) -- opted to upgrade using a different brand of 3G gear earlier this year. That standard is known as evolution data only, or EV-DO.