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Lucent gets Verizon job
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March 19, 2001: 9:50 a.m. ET
Troubled telecom equipment maker to supply $5B in wireless equipment
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NEW YORK (CNNfn) - Verizon Wireless, the nation's biggest wireless phone service, said Monday it agreed to a three-year, $5 billion contract with Lucent Technologies that will make Lucent Verizon's largest supplier of the latest wireless technology.
The deal, which could be a boost for troubled Lucent (LU: Research, Estimates), calls for the Murray Hill, N.J.-based telecom equipment maker to provide Verizon with a new technology for speedier wireless services known as CDMA 2000, which will be deployed coast-to-coast in the United States later this year, Verizon said.
The upgrade to Verizon's network could double its voice capacity and speed up data-transmission nearly 10 times, Verizon said.
 Verizon, which became the nation's largest wireless provider through the merger of Bell Atlantic and GTE, is purchasing high-speed data equipment from Lucent that will boost Verizon's ability to offer Internet, video and other services, the companies said.
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"This is an exciting undertaking, one that will make mobile communications much more convenient, with many more options for Verizon Wireless customers," Jim Brewington, president of Lucent's wireless networks group, stated.
The contract is a much-needed boost for Lucent, which has issued a series of earnings warnings over the last several quarters and has fallen behind rivals in the optical networking business, all issues that led to the ouster in October of Chairman Richard McGinn.
The deal also could give Verizon shareholders something to smile about since the company had delayed the initial public offering of its wireless unit.
In January, Lucent announced it was eliminating 8 percent of its workforce, or about 10,000 jobs, in an effort to trim $2 billion in annual spending. The bad news continued in February, when the company said the U.S. Securities and Exchange Commission was investigating possible fraudulent accounting practices concerning $679 million booked in revenue.
Lucent stock gained $1.07 to $11.106 in early trading while shares of Bedminster, N.J.-based Verizon (VZ: Research, Estimates) fell 28 cents to $47.05. 
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