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Network Duo Linked to Cingular

Ericsson AB (Nasdaq: ERICY) and Lucent Technologies Inc. (NYSE: LU) have been flagged by analysts as primary suppliers of Cingular Wireless’s commercial W-CDMA (Wideband Code Division Multiple Access) network, deals worth a total value of up to $5 billion.

“Our recent channel checks indicate that Cingular has arrived at a final decision regarding its WCDMA deployment, with only approval from its board of directors needed before a formal announcement is made,” writes Prudential Financial stock analyst Inder M. Singh in a research note. “The deployment is expected to cover both the legacy Cingular and AT&T Wireless foootprints nationwide.” (See Cingular Completes AT&T Deal.)

Singh touts Ericsson and Lucent as the vendors “likely to be awarded the bulk of the contract, with a split of 45% and 35%, respectively... We expect this deal to represent a major win for Ericsson and Lucent, with a total value of roughly $4-5 billion over the next 4 years.”

The Prudential analyst also tips Siemens AG (NYSE: SI; Frankfurt: SIE) to be awarded “roughly 15% of the deployment.” Nokia Corp. (NYSE: NOK) and Nortel Networks Ltd. (NYSE/Toronto: NT) appear to have been excluded from the project.

Lehman Brothers concurs with Singh’s findings. “Our checks indicate that Siemens is a participant on the access portion of Cingular’s WCDMA contract along with Ericsson and Lucent,” note analysts at the investment bank.

The carrier hopes to confirm details “in the next week or so,” according to Clay Owen, Cingular's senior director of public relations. “We issued an RFP in June and are very close to announcing the vendors. We are still negotiating contracts and wrapping it up but we haven’t made any public announcements yet.” (See Cingular Preps for 3G.)

Network buildout is expected to commence in 2005.

The W-CDMA air interface is part of the Universal Mobile Telecommunications Standard (UMTS). Used with existing GSM core networks, W-CDMA-compliant handsets and base stations can realistically increase wireless data transfer rates to around the 200- to 300-kbit/s mark.

Earlier this year Cingular’s main rivals announced their own plans for 3G rollout, opting to deploy CDMA2000 1xEV-DO (Evolution, Data Only) technology (see Sprint Confirms EV-DO Network and Verizon Repeats on 3G).

— Justin Springham, Senior Editor, Europe, Unstrung

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