Lucent inks Metromedia fibre deal; partners with China Unicom and Fujitsu
Lucent Technologies announced Tuesday deals with Metromedia Fiber, China Unicom and Fujitsu, aimed at the build-out of its fiber-optic networks in America and Asia.
This is the third major agreement Lucent (NYSE: LU) has inked with Metromedia Fiber Network, Inc. (Nasdaq: MFNX). The $330 million agreement calls for MFN to install Lucent's AllWave and TrueWave RS fiber in its networks in North America and Europe.
Lucent's shares were up 3/16 to 64 3/16. Lucent has competed with Nortel (NYSE: NT) and Cisco (Nasdaq; CSCO) to pluck off promising fiber-optic start-ups.
MFN, which lays optical Internet infrastructure in metropolitan areas, will use Lucent's AllWave and TrueWave fiber as it builds out its fiber-optic networks in 67 markets in North America and Europe. Through this agreement and others, MFN said it is ensuring access to the fiber it will require for its aggressive plan to install 3.6 million fiber miles internationally by 2004.
``The business opportunity for telecom equipment throughout Asia Pacific, excluding China, will approach $140 billion by 2004,'' Lucent International president Mike Butcher said in a release. ``In Japan alone, we believe the telecom market will reach about $81 billion over the same period."
The deal, which will cover the entire Asia region, will concentrate initially on the switching segment of next-generation networks but may expand to include other areas.
The alliance will include provision of hardware and software products from both companies and use a programmable switching platform developed by Lucent and Bell Labs. Financial details of the deal were not released.
The two companies will work together to develop next generation networking technology in areas that include optical, network management, data, wireless, billing systems, e-commerce, order management, fiber optics and switching.
China Unicom officials said the deal should help it quickly deploy the next-generation networking technologies and offer new services for its customers throughout China. The agreement covers a full range of next-generation networks including system design, construction and implementation as well as associated future expansions, enhancements and upgrades.
Lucent chairman Rich McGinn cited China's position as the largest untapped communications market in the world as reason to be excited about the deal. China Unicom and Lucent will also form a Technology Board to evaluate new technologies.
The two companies have signed a series of business over the past few years. China Unicom is the only network operator in China that can provide comprehensive communications services including local, long distance, wireless, data, satellite and paging services. Its recent decision to abandon the CDMA technology that was part of a deal with Qualcomm (Nasdaq: QCOM) had caused Qualcomm shares to take a beating.