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Voodoo Hushes on Nokia Deal

Light Reading
LR Mobile News Analysis
Light Reading
4/22/2004

Vodafone Group plc's (NYSE: VOD) antipodean subsidiaries are playing down speculation that Nokia Corp. (NYSE: NOK) has scored two multimillion-dollar deals for 3G network rollout in Australia and New Zealand.

According to local media reports, Nokia has beaten rivals LM Ericsson (Nasdaq: ERICY), Nortel Networks Ltd. (NYSE/Toronto: NT), and NEC Corp. (Nasdaq: NIPNY; Tokyo: 6701)/Siemens AG (NYSE: SI; Frankfurt: SIE) in securing the lucrative Wideband-CDMA contracts, estimated to be worth approximately $500 million.

The New Zealand Herald also states that Nokia placed newspaper advertisements late last month searching for a range of senior network staff to work on the project.

The W-CDMA air interface is part of the Universal Mobile Telecommunications Standard (UMTS), which has already been adopted as the European 3G standard. Used with existing Global System for Mobile Communications (GSM) core networks, the theory goes that W-CDMA-compliant handsets and basestations can increase wireless data transfer rates to a potential maximum of 2 Mbit/s.

Despite the media scuttlebutt, Vodafone claims that a final decision is yet to be taken.

"I can confirm that we are in the final stages of vendor selection. However, at this stage no contract has been signed, so media coverage is nothing more than speculation," comments Juliet Simpson, head of corporate communications at Vodafone Australia. "We expect to make a decision in the next week or so."

Sarah Williams, spokesperson for the carrier's New Zealand operation, backs up this view. "There is no finalized contract, and so nothing has been announced."

Nokia communications director Thomas Jönsson is unable to shed any light on the deal. "We can't comment right now," he tells Unstrung.

The Finnish vendor is the sole supplier of GSM and GPRS (General Packet Radio System) equipment to Vodafone New Zealand, while rival Ericsson networks the Australian operation.

Vodafone has been forced into financing the rollout of its own 3G networks down under, after failing to agree to a network-sharing deal with rivals (see Voodoo Goes It Alone). Commercial services are expected to be launched in "mid 2005" (see Vodafone Cozies Up Down Under).

— Justin Springham, Senior Editor, Europe, Unstrung

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