Bangkok--Nov 28--124 Communications
Sprint Awards US$1.1 Billion Deal to Nortel Networks for Next Generation Network Ushers in New Era in Networking, Providing Foundation for Future Services Expects to Be First Incumbent Carrier to Transform Entire Network to Packet Technology
RESEARCH TRIANGLE PARK, N.C. - Sprint* [NYSE: FON/PCS
] Local Telecommunications Division (LTD) expects to become the first incumbent U.S. carrier to transform its entire telephone network to a more cost-effective 'packet' voice network beginning with a supply and services agreement with Nortel Networks* [NYSE/TSE: NT
] estimated to be worth approximately US$1.1 billion over four years.
"This will position Sprint to offer - more cost-effectively than ever before - all of the high-quality residential and business telephone services its customers have come to expect," said Frank Dunn, president and chief executive officer, Nortel Networks. "In addition, it will enable Sprint to offer its high-speed Internet services to more people than ever before, and to establish a foundation for delivery of future services like desktop video conferencing and video caller ID."
"Sprint is leading what will become an important new stage in networking - the complete transformation of telephone networks with packet technology," said Frank Plastina, president, Metro Networks, Nortel Networks. "We believe this will position Sprint to drive substantially reduced operational and capital costs, while preserving their existing investments."
The transformation of current telephone networks has only just begun in the network core. Until now, the technology did not exist for the access portion of the telephone network, which connects subscribers to the network core. By leveraging Nortel Networks comprehensive Voice over IP portfolio, including softswitches and gateways, Sprint expects to be the first to packetize its entire network.
'Packetization' enables voice, video and data traffic to be divided into smaller pieces - called packets - that can be sent separately across the network. As a result, multiple phone calls and Internet connections can 'share' the same line. With packetization, bandwidth dedicated to a single call on today's networks can, for example, be reallocated during moments of silence in the conversation to transmit packets from other calls or Internet connections. This enables more efficient use of network resources. "Packetization not only makes the network simpler and more cost-effective, it also opens the door to new services that can be run across existing telephone lines," said Mike Fuller, president, Sprint Local Telecommunications Division. "With deployment of this leading-edge technology, we will address the expanding telecommunications needs of our customers."
"We selected Nortel Networks for this important network and business transformation because of a simple, fundamental Nortel Networks strength - the ability to build large, reliable networks effectively designed for delivery of new services," Fuller said.
Serving business and residential customers in 18 states from the mid-Atlantic to the Pacific Northwest, Sprint plans to transform its network to packet technology over an eight-year period. The agreement with Nortel Networks covers 100 percent of Sprint's planned first phase, a four-year activity expected to begin in January 2003 and, ultimately, to encompass 3.6 million telephone lines. Nortel Networks expects to ship the first equipment under the agreement in the fourth quarter of 2001, with initial deployment by Sprint in 2002 and volume shipments by Nortel Networks beginning in 2003.
Under this agreement, Sprint will leverage Nortel Networks expertise to deliver a seamless network migration - combining three separate networks into a single, converged network for voice, data and private line services. Sprint plans to deploy key elements of Nortel Networks carrier-grade Voice over IP portfolio, including Nortel Networks Succession* Communication Server 2000 softswitches, MG 4000 trunking gateways, MG 9000 access gateways, and Nortel Networks Passport* 15000 Multiservice Switches.
Sprint is a global communications company serving 23 million business and residential customers in more than 70 countries. With more than 80,000 employees worldwide and US$23 billion in annual revenues, Sprint is widely recognized for developing, engineering and deploying state of the art network technologies, including the United States' first nationwide all-digital, fiber-optic network. Sprint's award-winning Tier 1 Internet backbone is being extended to key global markets to provide customers with a broad portfolio of scaleable IP products. Sprint's high-capacity, high-speed network gives customers fast, dependable, non-stop access to the vast majority of the world's Internet content. Sprint also operates the largest 100-percent digital, nationwide PCS wireless network in the United States, already serving the majority of the nation's metropolitan areas including more than 4,000 cities and communities.
Nortel Networks is an industry leader and innovator focused on transforming how the world communicates and exchanges information. The company is supplying its service provider and enterprise customers with communications technology and infrastructure to enable value-added IP data, voice and multimedia services spanning Metro Networks, Wireless Networks and Optical Long Haul Networks. As a global company, Nortel Networks does business in more than 150 countries. More information about Nortel Networks can be found on the Web at www.nortelnetworks.com.
Certain information included in this press release is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include, among other things: the severity and duration of the industry adjustment; the sufficiency of our restructuring activities, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions; fluctuations in operating results and general industry, economic and market conditions and growth rates; the ability to recruit and retain qualified employees; fluctuations in cash flow, the level of outstanding debt and debt ratings; the ability to make acquisitions and/or integrate the operations and technologies of acquired businesses in an effective manner; the impact of rapid technological and market change; the impact of price and product competition; international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; the impact of rationalization in the telecommunications industry; the dependence on new product development; the uncertainties of the Internet; the impact of the credit risks of our customers and the impact of increased provision of customer financing and commitments; stock market volatility; the entrance into an increased number of supply, turnkey, and outsourcing contracts which contain delivery, installation, and performance provisions, which, if not met, could result in the payment of substantial penalties or liquidated damages; the ability to obtain timely, adequate and reasonably priced component parts from suppliers and internal manufacturing capacity; the future success of our strategic alliances; and the adverse resolution of litigation. For additional information with respect to certain of these and other factors, see the reports filed by Nortel Networks with the United States Securities and Exchange Commission. Unless otherwise required by applicable securities laws, Nortel Networks disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
*Nortel Networks, the Nortel Networks logo, the Globemark, Succession and Passport are trademarks of Nortel Networks. Sprint is a trademark of Sprint Communications.
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Business media: Trade media: Investment analysts:
David Chamberlin Ann Fuller 888-901-7286
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[email protected] End.
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