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AlcaLu Lands Brazilian Outsourcing Deal

Alcatel-Lucent (NYSE: ALU) has landed an exclusive network outsourcing deal with Brasil Telecom Participações SA (NYSE: BRP) that's reported to be worth about $1.1 billion over two years.

The news helped AlcaLu's share price climb €0.20, more than 4 percent, to €4.72 on the Paris Stock Exchange Thursday morning. (See AlcaLu's Stock Drop.)

News of the deal was broken by Brazilian business publication Valor Econômico and confirmed by the vendor.

"This network services contract with Brasil Telecom builds upon our long-term relationship with them, which is built on trust, confidence and a spirit of partnership. Their decision to have a single partner taking care of operations and maintenance of their network is quite visionary and is a pioneering strategy by the operator, both in Brazil and the region," said an Alcatel-Lucent spokesperson. (See AlcaLu Wins Brazil WiMax Deal , AlcaLu Wins Brasil Contract, Brazil Takes Lucent IMS, and Lucent Wins at Brasil Telecom.)

The vendor wouldn't comment on any financial details or the length of the engagement. Brasil Telecom, which runs submarine, fixed, and mobile (GSM) networks, had not responded to questions as this article was published. (See Brasil Telecom Reports Q3.)

According to the Valor Econômico report, Brasil Telecom has replaced seven separate outsourcing deals with a single AlcaLu contract that covers the operator's fixed and mobile networks.

That's bad news for Ericsson AB (Nasdaq: ERIC) and Nokia Networks , which are among Brasil Telecom's incumbent outsourcing partners. Ericsson struck a mobile infrastructure management deal in 2004, while the former Siemens Communications won a three-year contract covering fixed and mobile infrastructure in the states of Santa Catarina and Paraná in August 2006. (See Siemens Manages Brasil Telecom and Ericsson Wins in Brazil.)

AlcaLu beat the same competition to land an important European outsourcing deal in 2007. (See AlcaLu Answers Outsourcing Critics.)

The news comes as AlcaLu's Services Business division, which was on course to generate €4 billion ($5.9 billion) in revenues in 2007, announced a new president following the resignation of John Meyer. (See Services Head Quits AlcaLu and AlcaLu: The Network Integrator.)

— Ray Le Maistre, International News Editor, Light Reading

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