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Lucent banks on fast-modem demand

The struggling equipment maker sees big demand ahead for wireless modems as gadget sales pick up. A new deal will help it deliver the goods.

Lucent Technology on Wednesday signed a second company to help meet its expected demand for a faster generation of wireless modems for laptops and handheld devices.

The wireless telephone network equipment maker tapped Novatel Wireless to develop and supply modem cards that use UMTS (Universal Mobile Telecommunications System). That broadband system is supposed to increase the capacity of a cell phone network for voice calls and data downloads between 144 kbps and 2 mbps.

UMTS has emerged as the leading standard that carriers are adopting for the next generation of wireless networks that are still in the process of being built. The new networks are expected to be able to handle more phone calls at once and create wireless Web services that rival those of broadband companies.

Japanese carrier NTT DoCoMo already uses the system to power its cell phone network in specific areas of the country. U.S. carriers AT&T Wireless, Cingular Wireless and T-Mobile all intend to build networks using UMTS, also known as wideband CDMA, in the next few years.

Many analysts believe that for these so-called 3G, or third-generation, phone networks to be successful, they will have to become popular first with businesses--as corporations might be more willing initially to swallow higher prices for advanced services than consumers would be.

The first company Lucent asked to help supply UMTS cards was Belgium phone maker Option, spokesman Kurt Steiner said. The deal was signed in February. The modem cards will be part of a new offering by Lucent later this year, Steiner added.

Novatel Wireless' chief competitor is Sierra Wireless, which also has a deal with Lucent Technologies. Sierra Wireless is already supplying Lucent Technologies with 3G modems for laptops and PDAs (personal digital assistants) that use a standard rivaling UMTS known as CDMA20001xrtt.