Lucent offers $2 billion to WinStar

WinStar plans to expand its buildout strategy with $2 billion in equipment financing from Lucent Technologies.

Before the Lucent investment, WinStar was financed to complete a 40-city buildout and realize positive cash flow by 2000, said William Rouhana, chairman and CEO of WinStar. With the Lucent agreement, the company has targeted 100 cities-half of them in the U.S.

Lucent will provide network design, integration, buildout and equipment. "WinStar will be able to focus more sharply on key sales, marketing and customer satisfaction drivers of the business," said Nathan Kantor, president and chief operating officer of WinStar. WinStar will provide some engineering and construction services to Lucent on a contract basis and will retain full control of the business.

Lucent will supply products including its dense wavelength division multiplexing equipment, 5ESS switches, Internet protocol remote access technology and network management software, said Carly Fiorina, group president of Lucent's global service provider business.

WinStar uses radios from several vendors, but will likely begin to use primarily Lucent radios. "We're always going to have a bias toward Lucent products and equipment," Rouhana said.

Such a major agreement for WinStar, which already was perceived to be well-financed, may worry some competitors. "It ought to be a wakeup call for people in the [local multipoint distribution service] industry," said George Harter, executive vice president and chief technical officer of Hardin and Associates. While some LMDS companies have been spending time planning their businesses, others such as WinStar and Teligent have made significant strides building their networks.

WinStar has access rights to 3500 buildings and plans to increase that number to 8000 by the end of 1999, Rouhana said.