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Lucent Closes on Cingular 3G

Lucent Technologies Inc. (NYSE: LU) appears to be closing in on a lucrative 3G network contract with Cingular Wireless, a deal that would mark its first commercial UMTS (Universal Mobile Telecommunications System) win to date.

Earlier this year Unstrung revealed the vendor had emerged as a surprise contender for the network buildout (see Lucent Flagged for Cingular 3G). Lucent was later awarded a trial network with the carrier in Atlanta (see Cingular Trials Lucent UMTS).

In a research note today, analysts at UBS AG are talking up the possibility of Lucent securing a high-profile commercial deal.

“We believe that Lucent is likely to win a portion of the contract given that the vendor is U.S. based and is trialling in Atlanta, one of the cities targeted for deployment in early 2005,” notes Jeffrey Schlesinger of UBS.

Lucent declined to comment.

Ericsson AB (Nasdaq: ERICY), Nokia Corp. (NYSE: NOK), and Nortel Networks Ltd. (NYSE/Toronto: NT) are “likely battling it out for one or two remaining awards.”

According to Schlesinger, “Cingular’s vendor selection decision is expected imminently, with contracts for this W-CDMA network likely valued at ~$2 bn+ to be split across 2 to 3 vendors… We believe Cingular is aiming to turn on services in six cities, including Atlanta, Chicago, and Houston, by early 2005.” (See Cingular Preps for 3G.)

Cingular was unable to return calls by press time.

UMTS is the 3G upgrade to the GSM (Global System for Mobile Communications) standard, using a wideband-CDMA (W-CDMA) air interface on top of the GSM core network to increase voice capacity and boost data-transfer speeds to a theoretical 2 Mbit/s. Realistic rates to date have been around the 200- to 300-kbit/s mark.

— Justin Springham, Senior Editor, Europe, Unstrung

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