Verizon Signs Two Equipment Deals For 3G Network

Verizon Wireless on Monday said it had signed separate equipment deals with Nortel Networks and Lucent Technologies as part of the carrier's plans for a nationwide high-speed network.

Verizon, the largest U.S. cellular carrier, said it expects to invest more than $525 million in Lucent's wireless-infrastructure technology in the first two years of the three-year deal. The contract supplements current agreements between the two companies.

In the Nortel deal, Verizon plans to spend $167 million through 2005 to upgrade base stations within its 3G, or third-generation, network in San Diego, one of two cities where Verizon has launched high-speed service of up to 2 Mbps.

The other city is Washington, D.C., where Lucent is the primary supplier. The Lucent deal is for equipment to expand the service nationwide, a project Verizon hopes to complete by the end of the year.

Verizon is ahead of competitors in rolling out 3G services, Sam Bhavnani, analyst for market-researcher ARS Inc., said. AT&T Wireless, which Cingular Wireless has said it plans to acquire this year, is expected to launch trials in four cities by the end of the year. Sprint, on the other hand, isn't expected to begin rolling out a broadband network until next year.The Verizon trials in San Diego and Washington, D.C., are primarily for business users willing to spend $80 a month for the service, which can be accessed through a notebook equipped with a network card, Bhavnani said. Verizon plans to have network-ready cellular phones available by the end of the year.

Despite the billions of dollars invested by the carriers, the success of 3G networks is not guaranteed. Among the competitive threats is new technology for building wireless metropolitan-area networks (MAN).

WiMAX, for example, is an industry consortium building technology specifications for the broadband wireless standard IEEE 802.16. WiMAX hopes its specifications will encourage vendors to develop low-cost components for wireless MANs built around 802.16.

An 802.16 antenna can, theoretically, provide high-speed service 30 times faster than 3G to users within a 30-mile radius, making it a potential 3G killer in cities, Bhavnani said.

"I see WiMAX as a big threat to 3G," Bhavnani said. "It's really going to be a disruptive technology."0