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AT&T Smacks Siemens Rumor

Rumors are once more buzzing that AT&T Corp. (NYSE: T) has finally awarded an equipment contract in its long-awaited long-haul network upgrade (see AT&T DWDM Hope Dwindles).

This time around, the buzz began at the Supercomm tradeshow and has it that Siemens Information and Communications Networks Inc. is in the running for AT&T's next wave of WDM purchases.

In the past, Ciena Corp. (Nasdaq: CIEN), Corvis Corp. (Nasdaq: CORV), and Lucent Technologies Inc. (NYSE: LU) have all been the subject of similar rumors.

Sell-side researchers from Bear Stearns & Co. Inc., Merrill Lynch & Co. Inc., and other banks have published notes about the chatter.

"Our channel checks suggest that Siemens has awarded AT&T a service contract, and in turn, AT&T has allowed Siemens into its evaluation lab in anticipation of eventual deployment," writes Merrill Lynch analyst Simon Leopold. "However, our checks indicate that this potential award is not the long-haul network upgrade we have discussed in the past."

AT&T spokesman Dave Johnson describes the situation as a "a rumor about Siemens that was started in Europe," and he says neither AT&T nor Siemens have made any announcements regarding long-haul WDM gear. Johnson did point out, however, that AT&T is a huge consumer of WDM gear, with 1,300 systems in place, and that its network is always evolving. "We will continue to deploy [WDM systems] more as customers demand it and as growth warrants it," he says.

How big is the rumored Siemens deal? "We believe Siemens’s opportunity could be in the low double-digit millions, while the larger network upgrade could be worth $50 million to $200 million," Leopold writes.

Alas, it looks as though, once again, the AT&T's monster WDM contract has been put off further into the future. "That's happened before, so why should now be any different?" Leopold asked Light Reading on Thursday, who responded by shrugging and mumbling something inaudible.

— Phil Harvey, Senior Editor, Light Reading

zettabit 12/4/2012 | 11:55:19 PM
re: AT&T Smacks Siemens Rumor This is an interesting "de-bunking" of the Siemens-AT&T deal rumour. Considering that UBS Warburg, Glodman Sachs and JP Morgan had all issued research reports on this business award, it goes to show how much hard work rumour will create.

Only yesterday I was complaining about lack of reporting, and a response is here today.

This is great - sort of a like a "democracy in action".

Thanks for the investigation LR!
puddnhead_wilson 12/4/2012 | 11:55:14 PM
re: AT&T Smacks Siemens Rumor Thanks as well LR. zettabit, I will ask you the same question I asked when you brought this up on the other board though -- what research reports by JP Morgan are you talking about? As I told you then, as far as I can tell JPM actually has only issued notes DISPUTING this claim about the ULH deal, not SUPPORTING it! This is in both the day one and day two supercomm research notes by them

http://www.lightreading.com/bo...

BenGrahamMan in fact relayed here that JPM was reporting this contract was NOT rewarded, a full week before you were saying they DID:

http://www.lightreading.com/bo...

What other JPM reports are you talking aobut? I'm genuinely puzzled. Thanks in advance for responding this time.
BobbyMax 12/4/2012 | 11:55:13 PM
re: AT&T Smacks Siemens Rumor Being an international carrier, it behooves that AT&T award the contract to Siemens. AT&T has been awarding most of its contract to domestic careers which would inhibit AT&T chances of doing business abroad. Many international carriers would be able to fill in the needs of AT&T much better than many domestic careers.
alchemy 12/4/2012 | 11:55:10 PM
re: AT&T Smacks Siemens Rumor Being an international carrier, it behooves that AT&T award the contract to Siemens.

Why? Do you think the same about France Telecom buying exclusively from Alcatel? A company should always buy the best equipment (and service) at the lowest price. With the state of the dollar, you would think that Siemens selling German-content gear would be at a significant cost disadvantage. Of course, Siemens is a multinational as are most of the other huge players in this space so the distinction is quite blurred.
gea 12/4/2012 | 11:55:09 PM
re: AT&T Smacks Siemens Rumor BobbyMax:

All your base are belong to us.
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