UPDATE: Lucent, OneTel eye European 3G mobile market

OneTel plans to invest between $US10-20 billion in spectrum acquisitions and network build outs in the UK and Western Europe, officials revealed yesterday.

Detailing the company's strategic alliance with Lucent Technologies announced late Tuesday, Jodee Rich, executive director at OneTel, said the company is hoping to secure two or three spread spectrum licenses out of the nine auctions held across the region next year.

The move, if successful, will propel OneTel and its technology partner Lucent into the European third generation (3G) wireless market, officials said. Lucent, previously "locked out" from the European market due to delays with products and strong incumbents including Nokia, and Ericsson will have the opportunity to build networks in the areas previously not available, Rich said.

Funding for the plans will be vendor financed by Lucent in a 10-year, undisclosed financing deal, Rich said.

Additional funds will come from available cash and debt as well as a planned IPO in the UK, he said.

In addition, Rupert Murdoch's News Ltd, which paid $200 million to lift its stake in OneTel to 25 per cent from the 20 per cent it acquired in February on Tuesday, will contribute to the venture.

Rich said the alliance builds on the existing relationship between OneTel and Lucent formalised in April this year.

Under that agreement, OneTel selected to Lucent to build an Australia-wide digital mobile phone network in a $1.1 billion contract.

Lucent will build, operate and transfer 3G mobile networks to OneTel following the same business model the two companies entered into in April and September for the Australian wireless market, Rich said.

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