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Lucent Getting Lucky Abroad?Lucent Getting Lucky Abroad?

Lucent appears to be racking up some lucrative contracts in Europe

April 13, 2001

2 Min Read
Lucent Getting Lucky Abroad?

Lucent Technologies Inc. (NYSE: LU), which is undergoing a painful corporate restructuring, appears to have won some lucrative new contracts in the optical sector -- but it's not exactly eager to share the news.

"Lucent knows it has lost credibility, and they want to keep a low profile," said Ariane Mahler, senior telecom equipment analyst at Dresdner Kleinwort Wasserstein. "But they have more things going on than meet the eye."

According to several sources, including Mahler, Lucent is close to finalizing a contract with Global Crossing Ltd. (NYSE: GX) to supply its LambdaRouter for the carrier's network linking European countries to other locations worldwide.

For its part, Lucent denies the existence of any solid contract with Global Crossing. "We have concluded very successful trials with Global Crossing, and they've deemed us capable of carrying live traffic," says a Lucent spokesperson. "We hope our work with them will lead to commercial deployment. But we have no contract to report with them right now."

Global Crossing did not return calls at press time.

Meanwhile, Lucent's been active elsewhere, too. Late in March, for instance, Lucent announced it will supply Deutsche Telekom AG (NYSE: DT) with WaveStar OLS 400G DWDM gear and WaveStar ADM 16/1 transmission equipment as part of a multiyear, pan-European contract.

While terms of the deal are undisclosed, the amount is apparently significant enough to change Lucent's fortunes in the short term. Research firm RHK Inc., for instance, cites the Deutsche Telekom win as responsible in part for Lucent regaining a sizeable share of the WDM market in Europe (see European DWDM Sales Triple). Reports late last year showed the vendor's share to have dropped to half its previous level (see Nortel Spins Past Ciena).

Lucent also has won a series of optical contracts elsewhere in Europe. In March, for instance, it announced that regional broadband provider Jazztel PLC (Nasdaq: JAZZ) will be using Lucent's WaveStar ADM 16/1 to populate metro networks in Spain and Portugal. Lucent's also closed a deal for its WaveStar OLS 400G DWDM system with Telecom Italia.

It's not known to what extent any of these wins resulted from Lucent's customer financing program, which RHK describes as helping contribute to its market share growth. Also, it's not yet clear whether any of these wins will help Lucent back to profitability anytime soon.

Still, it can't hurt. "They need a couple of good quarters, showing decent, steady performance," says Mahler. Then, she says, they might be more ready to take the publicity plunge.

- Mary Jander, Senior Editor, Light Reading http://www.lightreading.com

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