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Optical/IP

Vendors Sign BT 21CN Contracts

Months later than expected, half of the eight preferred vendors for BT Group plc (NYSE: BT; London: BTA)'s next-generation 21CN network have finally agreed to contracts that tie them to the £10 billion (US$17.4 billion) project. (See BT Signs 21CN Deals.)

Ciena Corp. (NYSE: CIEN), Huawei Technologies Co. Ltd. , Lucent Technologies Inc. (NYSE: LU), and Siemens Communications Group have all signed on the dotted line. (See Ciena Finalizes BT Agreement, Huawei Signs 21CN, and Lucent Signs 21CN Contract.)

That leaves Alcatel (NYSE: ALA; Paris: CGEP:PA), Cisco Systems Inc. (Nasdaq: CSCO), Ericsson AB (Nasdaq: ERIC), and Fujitsu Ltd. (Tokyo: 6702; London: FUJ; OTC: FJTSY) still to agree on final details.

BT says it expects the remaining four deals to be completed early in 2006, and that there are no specific reasons for the delays. "These are very complex negotiations, they're very detailed and take a lot to work through," says a BT spokeswoman.

Between them, the eight vendors' deals are expected to be worth about £3.4 billion ($5.9 billion), about a third of the total cost of the network transformation project, which is due to be completed in 2010. At that stage, BT plans to have switched off its PSTN and be running all its voice and data traffic over a converged IP network.

Lucent says its deal, which involves the supply of various Juniper Networks Inc. (NYSE: JNPR) routers for BT's IP core plus deployment and maintenance support services, is worth tens of millions of pounds over multiple years, but wouldn't provide any further details.

The eight preferred vendors were named in April this year, and the contracts were expected to be signed a few months later, but intense negotiations -- with BT believed to have made stringent demands of the equipment firms -- have led to delays in the final deals. (See BT Unveils 21CN Suppliers.)

One source close to the 21CN process told Light Reading that one of the North American suppliers was believed to have been advised by its lawyers not to sign BT's contract as the terms were deemed to be too demanding and not economically viable. BT declined to comment on the issue.

— Ray Le Maistre, International News Editor, Light Reading

Mark Sebastyn 12/5/2012 | 2:48:39 AM
re: Vendors Sign BT 21CN Contracts BT is going to have a front row seat to witness the impact Huawei pricing ($10 a DSL port anyone) has on more traditional providers at an incumbent carrier.

Around 60% of Cienas revenue going forward is transport, so whatever happens at BT (good or bad) is going to be very apparent. Let's hope it isn't like the BSNL deal Nortel did.

Anyone have an idea of how BT is splitting the contract between the two vendors?

Andrew
www.nyquistcapital.com
markjohn20 12/5/2012 | 2:48:33 AM
re: Vendors Sign BT 21CN Contracts '...one of the North American suppliers was believed to have been advised by its lawyers not to sign BT's contract as the terms were deemed to be too demanding and not economically viable.'

Does this statement relate to Cisco, by any chance?!

zher 12/5/2012 | 2:48:32 AM
re: Vendors Sign BT 21CN Contracts it doesn't matter coz CSCO has to sign. BT 21CN is a series of fundamental projects, it's not just money in terms of a long run.
materialgirl 12/5/2012 | 2:48:19 AM
re: Vendors Sign BT 21CN Contracts It does seem that the first signers, LU, CIEN and Huawei (don't know about Siemens) will sign just about anything. Given ERICY's "strong" position, their not signing yet seems like a red light.
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