Nortel Wins $2B Contract

Not sure quite to make of the news that Nortel has won a five-year, $2-billion contract to provide equipment and services to Verizon Wireless. From previous experiences dealing with Nortel and large contracts, I’m reluctant to trumpet the fact Nortel has won a $2-billion contract because who really knows if $2-billion of business will actually materialize over the next five years given technology changes, strategy changes and consumer behavior changes. Nevertheless, there has to be some good news from the fact Verizon will be using additional CDMA2000 radio base stations, switching, IP platforms, optical networking solutions and related equipment from Nortel.
“This contract confirms Nortel’s leadership in supplying innovative CDMA mobile broadband technologies and driving advanced communication services,” said Nortel’s Richard Lowe. “It’s our long term partners that know us best, so we’re particularly proud when an industry leader like Verizon Wireless asks us to be part of their team for another five years.” Of course, it’s fine to be the leader in CDMA other than the fact CDMA’s on the decline while GSM is on the rise but that’s another story for another day.
In mid-day trading, Nortel is up 58 cents to $24.33. A Reuter story on the deal can be found here.
More thoughts: I knew there was a reason this story sounded eerily familar. In January 2004, Nortel signed a five-year deal estimated to be worth $5-billion with Verizon Communications to migrate the carrier’s local and long-distance networks to Internet-based technology from older circuit-based systems. The agreement made Nortel the exclusive provider of Verizon’s local and long-distance class four and class five switches, and Voice-over-Internet Protocol and multi-media services equipment over the next 18 months. I’d be very surprised if Nortel will collect $5-billion from this agreement.

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4 Responses to “Nortel Wins $2B Contract”

  1. Apple Says:

    I knew there was a reason this story sounded very familiar. In January 2004, Nortel signed a five-year deal estimated to be worth $5-billion with Verizon Communications to migrate the carrier’s local and long-distance networks to Internet-based technology from older circuit-based systems
    ————
    re
    Yes, investors remember NT-VZ big deals!
    2004 big deal was wireline deal with VZ. VZ signed only initial agreement /LOA_I/ and has never signed the deal. Nortel installed a dozen switches instead of 2500 as planned. /There was Tyler Hamilton’s article about that/

    5 years, it’s a stretch on its own.
    As you said, what does it mean, 5 years of what?
    In my opinion
    Market did not buy that news.
    Any other company signing $2 bill contract would move the stock 10 % at least.
    NT is actively rewriting old deals, reheating them, and making big PRs!
    It’s good, it shows that customers are ready to wait and see what Mike can do, if Mike Z can turn around that company and bring it back to life_ profitability _and honesty!
    My best wishes to all honest Nortel’s employees!
    and at the same time I wish all crooks would get what they deserve for defrauding NT’s investors.

  2. jayemmay Says:

    Mark, more investigation on your part is needed. Verizon has long been a customer of Nortel. Is the most recent announced deal a replacement of others or what?

    In a brief search that I did, I found three deals. One: Sept 3, 2003, in a Nortel press release, there was a deal for $1 B for more CDMA 2000. Two: On Jan 7, 2004, in iternetnews.com, a proposed 5 year deal is announced for conversion to VoIP. Three: On July 19, 2006, techweb.com reported a major deal about EV-DO.

    Any more insights from you?

  3. nortel Says:

    This is a new deal with Nortel supply new technology to replace existing gear being used by Verizon already. The question is whether the $2-billion will materialize or whether it’s a projected number based on estimates.

  4. Apple Says:

    Two: On Jan 7, 2004, in iternetnews.com, a proposed 5 year deal is announced for conversion to VoIP
    ===========
    re
    You did it again.
    I showed you that that deal was/is dead but you are still listing it as the deal!
    No, the Jan 07 2004 was DOA!
    2500 switches bocome dozen.
    Read my leaps
    DOZEN!
    Do you know what it means?
    It means NT has PRs with propaganda_misinformation!
    You are the proof of that NT’s propaganda works well!
    You think, Verizon signed the deal with NT on Jan 07 2004, don’t you?
    Yes you do, but it’s wrong!
    Search for the article I mention about DOZEN switches installed and the deal was never signed!
    never signed!
    the letter of intentions was signed but not the deal!
    Stop your BS!

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