NEW YORK - Sprint Corp. said on Tuesday it would spend $US3 billion ($NZ4.2 billion) over the next three years to upgrade its mobile network including the development of high-speed Internet services.
Sprint, the No. 3 US wireless phone company, said it signed three-year deals with its current suppliers Lucent
and Nortel Networks as well as a contract extension with Motorola through the end of 2006.
Lucent said its contract with Sprint would be worth more than $US1.5 billion over three years and Nortel said its portion of the agreements would be worth about $US1 billion. Motorola said its extension would be worth $US450 million.
Sprint said in June it would add high-speed data technology known as EV-DO to its network in major US metropolitan areas in 2005. The company said on Tuesday this upgrade would cost $US1 billion, with the majority being spent in 2005.
While Sprint had been expected to buy equipment from these companies, Pacific Crest analyst Tim Daubenspeck said the deal appeared to boost Motorola slightly at Lucent's expense.
"I would say Motorola got a larger percentage than I expected and Lucent got a smaller amount," said Daubenspeck who estimated that Lucent had previously won up to 65 percent of Sprint's mobile network business and Nortel about 30 percent. This implies that Motorola's share has risen to about 15 percent from less than 10 percent.
Sprint and rivals such as Verizon Wireless are investing in faster networks that can deliver services like video and Web surfing. They are betting that revenue from such services will offset revenues lost from declining mobile phone call prices.
Sprint said it would reveal soon which markets will be first to get the new services. The latest contracts include options for EV-DV, a next generation technology it is considering, as well as other improvements to its network.
Sprint shares were up 7 cents at $US23.12 morning trade on the New York Stock Exchange where Motorola shares were up almost 1 percent at $US18.43. Lucent stock was up 3 cents at $US3.90 and Nortel was up 8 cents at $US3.75.
- REUTERS
