Amid a flurry of speculation it might spin off its microelectronics group, Lucent Technologies Inc. won a contract to be the primary network infrastructure supplier to Verizon Wireless.
The deal, estimated at $1.5 billion, will allow Verizon Wireless to increase its coverage and capacity in key markets and offer third-generation services, Verizon said. A field trial of Lucent’s and Qualcomm Inc.’s Code Division Multiple Access 1X-based 3G technology is planned for Philadelphia’s wireless network soon, and is expected to support data rates up to 153 kilobits per second.
The letter of intent covers a broad range of products and systems, including a full line of 3G-ready Flexent TM mobile switching centers, CDMA base stations and access and transport systems based on asynchronous transfer mode and Internet Protocol solutions.
Several press reports surfaced last week indicating Lucent is readying to spin off or issue a tracking stock for its fast-growing microelectronics unit, although Lucent has declined to comment on the rumors.
The microelectronics unit produces integrated circuits, wireless chipsets and optical equipment such as lasers. The unit generates approximately $5.4 billion in sales per year, accounting for roughly 18 percent of Lucent’s total revenue. As a separate entity, analysts value the unit at between $40 billion and $50 billion.
Lucent’s recent ailing stock price is being cited as one of the principal drivers of a spinoff. The company’s share value has fallen 27 percent since the beginning of the year.
At RCR press time, Lucent stock was trading at $60.56, up 56 cents from the previous day’s close.
