Verizon Wireless Selects Nortel for $500 Million Network

Verizon Wireless has signed a letter of intent to purchase an estimated US$500 million in wireless and optical equipment from Nortel Networks. This planned agreement is expected to provide significant savings to Verizon Wireless’ network infrastructure costs.

The agreement also is expected to include optical transport and asynchronous transfer mode (ATM) switches for major metropolitan markets, and additional equipment for expansion of an existing microwave backbone network.

By the end of 2000, Verizon Wireless will invest more than US$3 billion in its US network to increase capacity for wireless voice and data services. This investment will involve the properties of GTE Wireless (based on the close of the Bell Atlantic and GTE Corporation merger).

Verizon Wireless and other operators plan to use new high-speed, highly reliable Wireless Internet services to capitalize on an anticipated explosion in demand for wireless data. The Yankee Group, a leading industry research firm, expects the U.S. wireless data market to grow from US$1.8 billion last year to US$13.2 billion by 2003, with as many as 25 million wireless data users nationwide by 2002.

Already preparing to conduct trials in Dallas of a packet-based, all-IP (Internet Protocol) wireless network architecture, the companies are also planning a second trial – to begin in August 2000 at a location to be determined – using third generation (3G) cdma2000 digital radio technology.

The first phase of cdma2000 technology – called 1XRTT – is designed to double voice capacity and support data transmission speeds up to 144 kilobits per second, or 10 times the speed commonly available today. cdma2000 is ultimately expected to offer speeds up to 384 kbps for mobile and two megabits per second for stationary applications.

Verizon Wireless is the largest wireless communications provider in the US with over 16 million wireless voice and data customers and nearly four million paging customers. The new, coast-to-coast wireless provider was formed by the combination of the US wireless businesses of Bell Atlantic and Vodafone AirTouch.

The new company includes the assets from Bell Atlantic Mobile, AirTouch Cellular, PrimeCo Personal Communications and AirTouch Paging. Verizon Wireless will be further strengthened by the addition of the US wireless assets of GTE when it completes its merger with Bell Atlantic.

When the merger is complete, the new company will have a footprint covering nearly 90 percent of the US population, 49 of the top 50 and 96 of the top 100 US markets. Verizon Wireless, headquartered in New York City and Bedminster, NJ, employs 30,000 employees.