Nortel, Star One Ink Broadband Deal

Nortel will build and operate a broadband network for Star One.
Author:
Publish date:

Nortel

(NT)

said Monday that it will spend $224 million to build and operate a broadband network for German wireless communications company

Star One

.

After one year, the Canadian telephone network company will transfer the operational responsibilities to Star One, according to a statement from Nortel.

"Until now, monopoly by the national telecoms operator has kept access costs high, limiting broadband access in the last mile in Germany,'' said Christian Golaszewski, chief operating officer of Star One, in a statement. Star One, he said, will be able to deliver these services at a lower cost through so-called local loops, or regional broadband networks.

Star One expects to invest about $490 million to bring wireless services linking more cities in Germany and to compete with dominant European players like

Deutsche Telekom

(DT) - Get Report

and

Vodafone Airtouch

(VOD) - Get Report

.

"Broadband wireless networks are beginning to take off across Europe as more and more countries grant operator licenses,'' said Pascal Debon, president of service provider solutions for Nortel, in a statement. "We can quickly equip service providers like Star One to roll out a broadband wireless network in a cost-effective manner, thus empowering them to become key players in an increasingly competitive marketplace."

Nortel closed Monday up 8 3/8, or 9.1% at 100.