Nortel gets $2B contract from VZW

Nortel Networks has cemented a 5-year $2 billion contract with Verizon Wireless for future CDMA network upgrades, including its EV-DO Revision A upgrade solution.

Nortel officials said the contract was expected and does not include any new network deployment plans. But from that deal, Verizon Wireless gets the pick of Nortel’s technologies, from additional CDMA 1X base station deployments to EV-DO upgrades, 1X stations, Rev. A upgrades and EV-DO base stations, as well as a host of switching, IP, optical networking equipment used to build the network core. The contract also includes the first elements of Nortel’s IP multimedia subsystem (IMS) platform that Verizon Wireless will roll out as part of its Advances to IMS (A-IMS) initiative.

While much attention has been focused on Sprint’s 3G rollouts, they actually account for only a small part of the capex Verizon Wireless has been investing in its network. The upgrade to EV-DO--which requires a software upgrade and a new line card at the base station--in 2004 and 2005 resulted in only $1 billion spent, of which Nortel only received $167 million. In July Nortel was given the go-ahead to begin its Rev. A upgrade, but those deployments will probably only net Nortel a small portion of its revenues from Verizon Wireless over the next few years.

“It’s our long-term partners that know us best, so we’re particularly proud when an industry leader like Verizon Wireless asks us to be part of their team for another five years,” Nortel president of mobility and core networks Richard Lowe said in a statement.