Lucent's ( LU) wireless winning streak is persuading Wall Street to overlook a losing legacy. Though its conventional telecom equipment business remains torpid, Lucent is emerging as a reinvigorated leader on the wireless front. Happily for the company, wireless happens to be one of the few areas of solid spending in the networking industry. On Tuesday, the Murray Hill, N.J., telecom gear shop finally netted a long-awaited supply deal with Verizon Wireless. The agreement, worth $5 billion over six years, picks up where a previous three-year arrangement left off and includes a $525 million wireless data equipment upgrade announced in March. Observers say the deal cements Lucent's status as Verizon Wireless' primary equipment supplier. But beyond that, Tuesday's win suggests Lucent could be ready to pick up other big contracts across the industry. On Tuesday, Lucent rose 11 cents to $3.49.
Lucent also figures to play a leading role in Sprint's ( FON) fast mobile Internet upgrade plans, announced last month. Sprint opted for a technology called evolution data only, or EV-DO. But the Kansas telco didn't specify how much it planned to spend or whose equipment it was going to use. Analysts expect Lucent and Nortel ( NT) to split the contract, with slightly more going to Lucent, given the distribution of the existing equipment. And looking ahead, Lucent is expected to be on a short list of vendors for Cingular's third generation, or 3G, upgrade plans. The company, a joint venture of SBC ( SBC) and BellSouth ( BLS), is poised to become the nation's largest wireless telco, pending its acquisition of AT&T Wireless ( AWE). This spring, Lucent won an exclusive supply arrangement with Cingular to build a universal mobile telecommunications system, or UMTS, network in Atlanta for trials. The deal provides a toehold in what could be a fairly large opportunity for Lucent.