4G Deal For Alcatel Lucent SA (ADR) (ALU) With China Telecom

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It was a big contract win for Alcatel Lucent SA (ADR) (NYSE:ALU). The company was awarded a big 4G deal by China Telecom, which would make it one of the three top suppliers of high-speed mobile broadband access. The contract follows the government’s license grant to use FDD LTE technology. It also came on the back of Nokia Networks claim that it became the biggest, non-Chinese, vendor for 4G for China Telecom Corp. Ltd.

Third Pecking Order

Alcatel Lucent SA (ADR) (NYSE:ALU) was the third company in the 4G pecking order in China. The nation’s big supplier of LTE equipment, Huawei Technologies Co. Ltd., would have been fortunate enough to get a big share of the business. The company disclosed that it would deploy the network of LTE access for China Telecom in forty cities in 12 provinces. This included Jiangsu, Shandong, Shanghai, Zhejiang, Hubei, Gangxi, Jiangxi, Inner Mongolia, Liaoning, and Fujian.

In the first half of the current year Alcatel will roll out its 9926 eNodeB network technology, as well as related services.  The report indicated that Nokia has not indicated the geographical area of the agreement while announcing its pack with China Telecom during the Mobile World Congress.

Financial Terms

Both Alcatel Lucent SA (ADR) (NYSE:ALU) and Nokia have not disclosed the financial details about their 4G agreements with China Telecom. However, the geographical information provided indicated that the contracts would have a significant value, since it involves some of the biggest cities in China. Before the recent announcements, both the companies were coordinating with China Telecom for the deployment of 4G network on a trial covering 56 cities.

Nokia and Alcatel Lucent SA (ADR) (NYSE:ALU) are expected to take advantage of China Telecom’s spending, since both the companies witnessed year-over-year drop in the Chinese business in the December quarter. About 20% of revenues came from Asia-Pacific for Alcatel, whereas Nokia generated 12% of its revenue from China.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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