Alcatel-Lucent wins $6 bln Verizon Wireless deal
NEW YORK (Reuters) - Alcatel-Lucent won a three-year contract worth $6 billion to supply Verizon Wireless with network equipment, software and services, the companies said on Monday, lifting shares of the Paris-based telecommunications equipment maker.
Alcatel-Lucent will provide a wide range of products and services to help Verizon Wireless, a joint venture of Verizon Communications and Vodafone Group Plc, boost the coverage and capacity of its broadband network based on CDMA2000 technology, they said.
Alcatel-Lucent, formed through a transatlantic merger last year, will continue to be the primary network infrastructure supplier to Verizon Wireless, the companies said.
Shares of Alcatel-Lucent rose 4.14 percent to 9.06 euros after briefly rising as high as 9.23 euros.
The shares have been stuck in a bearish trend since the company issued a profit warning in mid-January that highlighted the complexities of the merger and raised concerns of slower spending amid consolidation in the telecommunications sector.
"While not wholly unexpected, it is encouraging that Verizon is extending its strong Lucent ties to the merged company," Prudential Equity Group analyst Inder Singh said in a research note.
"We believe this announcement also reflects a resumption of more normal business at Alcatel-Lucent --and more importantly the re-filling of the order pipeline, after several months of disruption from the ongoing merger integration," he said.
The company said in February that it would cut 12,500 jobs, or 16 percent of staff. It has said the company suffered from uncertainty created by the tie-up, with some clients unsure of which products they could continue to rely on.
Shares of Verizon Communications fell 1.15 percent to $37.68.
