Verizon Wireless moved forward with its mobile Internet upgrade plans Monday, parceling out advanced technology supply contracts to Lucent ( LU) and Nortel ( NT).
As expected, Lucent won more of the business, scoring a two-year agreement to supply $525 million worth of so-called evolution data only, or EV-DO, equipment. Nortel will provide $167 million worth of the gear. Verizon made the announcement to kick off the annual Cellular Telecommunications and Internet Association wireless industry conference in Atlanta this week. Investors are hoping to hear of other big developments from players like Nokia ( NOK) and Motorola ( MOT). In January, Verizon Wireless sparked a rally in the cellular infrastructure sector when the company, a joint venture of Verizon ( VZ) and Vodafone ( VOD), said it planned to increase spending by $1 billion. Verizon Wireless hopes the new equipment will aid its efforts to sell subscribers fast Net connections for laptops and PDAs. Nortel was the first vendor to be named in the January announcement, causing some investors to wonder if Lucent was losing market share to its Canadian rival. But the companies' respective shares of the deal reinforces Lucent's role as lead supplier to the nation's largest wireless telco. In fact, Verizon Wireless is expected to renew a three-year, $5 billion contract with Lucent that expires next week. The arrangement will continue where the previous pact left off and include network upgrades, expansion and maintenance work. The deal is likely to be valued in the billions of dollars. Lucent declined to comment on the negotiations over the larger contract, nor would a company representative offer any possible time frame for when the contract would be announced. Last fall, Verizon Wireless awarded Nortel its share of the upgrade and expansion work, which it valued at $1 billion. Shares of the two wireless gearmakers were largely unchanged in early trading Monday.
Even though AT&T tried a last-minute bribe of promising 5,000 new U.S. jobs to help gain support for the deal, the Justice Department filed a complaint to fight the combination of the nation's No. 2 and No. 4 wireless carriers.