Lucent to auction US$90M worth of gear online

Lucent Technologies Inc. plans to auction US$90 million of telecommunications gear on Bid4Assets Inc.'s Web site.

The equipment is left over from a recently completed multibillion-dollar contract with Saudi Arabia to lay down a telecommunication infrastructure for the desert kingdom, said Michelle Davidson, a Lucent spokeswoman. Lucent finished the project as planned but had equipment left over, she said. The equipment carries a list price of about US$90 million.

In the first phase of the auction, which started Aug. 27 and ends Wednesday, equipment for GSM (Global System for Mobile Communications) wireless communications networks and for Class 5 switches for local telephone offices will be among the gear on sale. Data networking equipment, installation materials and some hardware for central offices are among the gear slated for auction in the next phase, beginning Sept. 17. Multiplexers and digital cross connects for handling multiple phone lines will be part of the third phase of the auction, which begins Oct. 1.

Bid4Assets specializes in seized, surplus and bankruptcy auctions.

Davidson couldn't immediately determine whether Lucent had earlier sold equipment at auction like the Bid4Assets sale, but she said Lucent is always looking for ways to reduce inventory levels. It is having some success doing this, she said, citing a $1 billion drop in inventory between the second and third quarters.

Big carriers have cut back on plans to buy new equipment, while failures of smaller carriers and dot-com companies are flooding auctions with lightly used gear at fire-sale prices. Telecommunication equipment makers have thus been hard pressed to reduce their inventories of older gear. However, one analyst said progress is being made.

"I think they're substantially working through it this year," said Lee Doyle, vice president of network equipment analysis at technology research firm International Data Corp (IDC). The oversupply of today is a result of the overdemand of the past few years. "They were trying to provide equipment in a market that was doubling every year," Doyle said.

While Cisco Systems Inc. routers have been sold on the eBay Inc. auction site by closed dot-coms for pennies on the dollar and sometimes still in the factory bubble wrap, the kind of equipment Lucent is putting up for auction isn't as generic, Doyle said.

"Routers are more of a commodity ... With a Cisco router, if you have the model number, you know what you're getting," he said. Lucent's equipment at auction is specialized for carriers, and isn't necessarily interoperable with other carrier gear. "I wouldn't buy DWDM (Dense Wave Division Multiplexing) gear on eBay," he said.

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