TyCom and Global Crossing announced Tuesday that the companies have settled all legal proceedings against each another. The legal dispute, which included arbitration and appearances in Federal court, concerned the agreements between the two companies to build fiber-optic cable routes across the Atlantic and in South America. TyCom, a subsidiary of Tyco International, builds undersea cable systems. Telecommunications carrier Global Crossing filed a lawsuit against TyCom in May last year seeking more than $1 billion in damages for breech of contract related to the Atlantic and South American routes. The two companies announced in September 2000 a settlement of one of the disputes concerning the Atlantic cable system that required Global Crossing to pay TyCom $19 million to terminate a maintenance contract. The two also kept working together on building other cable systems throughout the legal battles, including an August 2000 deal for a $100 million cable system in the Pacific for Asia Global Crossing, a company 59 percent owned by Global Crossing along with stakes by Softbank and Microsoft.
Agere Systems will provide equipment to help TyCom run its undersea communications network over the next 12 months in a three-year deal valued at $70 million. Allentown, Penn.-based Agere will sell pump lasers to TyCom. The lasers will help amplify high-speed light signals sent along fiber-optic glass wires that are placed underwater and carry voice and data information between continents. Agere makes components and chips for communications gear. TyCom is in the first phase of building its worldwide network that will connect more than 30 cities around the world. TyCom expects this phase will last no longer than the third quarter of 2002. Manufacturing conglomerate Tyco International owns about 86 percent of TyCom. Lucent Technologies spun off Agere in an IPO last March and plans to distribute the remaining shares it owns of the company to its shareholders by October.
TyCom, the undersea fiber-optic network spinoff of Tyco, posted a fourth-quarter profit, excluding one-time IPO-related charges, of $89.9 million, or 18 cents a share, compared with net income of $41 million, or 9 cents a share, for the same period last year. Wall Street expected the company to earn 10 cents a share, according to First Call/Thomson Financial. TyCom's quarterly revenue increased to $587.5 million, up from $506.7. In July, TyCom offered stock in the company via an initial public stock offering (IPO).