Sprint announced two US$1 billion deals Wednesday, tapping Nortel Networks and Lucent Technologies to provide products for the build out of Sprint's upgraded wireless network.
Sprint is setting up its 3G (third generation) wireless service aimed at bringing faster Internet connection speeds to users and at making it more feasible to accomplish bandwidth-hungry tasks such as downloading music or playing videos on a wireless device. Sprint is expected to begin upgrading its current PCS (personal communications services) network with Nortel and Lucent over the course of this year, Sprint said in a statement.
Nortel and Lucent will receive close to $1 billion each from Sprint during the next three years to provide the company with a variety of hardware and software products. Sprint will purchase base stations from Nortel, along with other types of specialized networking equipment. Lucent will deliver base stations, mobile switching centers and software developed for wireless networks.
Both Nortel and Lucent were hit hard by the slowdown in technology spending this year, as many companies pulled back sharply on networking equipment purchases. Nortel has already laid off 20,000 workers and plans to cut another 10,000 before year end. Lucent has also cut 10,000 jobs and according to published reports will reduce its staff by another 10,000 in the coming months.
The deals with Sprint could help boost the slumping networking market and help bring the U.S. up to speed with its wireless technology. The U.S. has lagged behind Asia and Europe in the race to build 3G networks. The higher data transfer speeds achieved with 3G could allow wireless devices to handle more of the tasks that PCs are capable of, such as downloading files.
The first phase of Sprint's migration to 3G is planned for select areas in the U.S. by the end of this year, with a nationwide rollout in about the third quarter of next year. The 3G upgrade is expected to double network capacity, boosting data transmission from 14.4K bps (bits per second) to 144K bps, Sprint said in April.
Higher speed 3G service is due out in 2003, with improvements for voice and data services made throughout 2004.