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T-Mobile Signs Large Deals With Ericsson, Nokia Siemens Networks

05/08/2012 | 11:50am US/Eastern

--Ericsson, NSN chosen for T-Mobile 4G LTE build-out

--T-Mobile says cost of build-out is about $4 billion

--Ericsson says deal strengthens its position in North America

(Adds detail throughout)

 
   By Greg Bensinger and Sven Grundberg 
   Of  
 

Ericsson (ERIC) and Nokia Siemens Networks late Monday bagged a major contract from T-Mobile in the U.S., to provide equipment and services for its planned high-speed mobile broadband network.

T-Mobile, a unit of Germany-based Deutsche Telekom AG (>> Deutsche Telekom AG) has been late in upgrading its network to offer the high-speed mobile broadband service known as 4G LTE. Last year it put strategic plans on hold in anticipation of being taken over by AT&T Inc. (>> AT&T Inc.), in what became a failed $39 billion bid for the fourth-largest U.S. carrier.

T-Mobile announced the agreements at a conference in New Orleans on Monday.

The network deals with Ericsson and NSN, spanning about three years, will help T-Mobile build a 4G network to cover major markets starting next year to compete with Verizon Wireless, AT&T, and Sprint Nextel Corp. (S).

In an interview, Thomas Noren, head of radio products at Sweden's Ericsson, described the contract as "very important" for the Swedish company.

T-Mobile will build the network over the next few years at a cost of about $4 billion and is using funds and wireless airwaves it won from AT&T following the failed takeover bid.

"This is a major contract which strengthens our position on the North American market," Noren said. "Ericsson has been very successful when it comes to LTE in North America, and we have been chosen to deploy LTE by all major operators in the region."

He added that all the competing major network wireless vendors, which include companies such as Alcatel-Lucent (ALU) and China's Huawei Technologies Co., were competing for the T-Mobile contract.

The deal is also important for NSN, the loss-making network joint venture of Siemens AG (SI) and Nokia Corp. (NOK), which has had a hard time competing for network infrastructure contracts against market leader Ericsson and rapidly growing Huawei.

In 2010, NSN launched a bid for the wireless networks business of Motorola Solutions Inc., to strengthen its position with major U.S. carriers. The deal was completed in April last year.

-By Greg Bensinger and Sven Grundberg, Dow Jones Newswires; 212-416-4676; greg.bensinger@dowjones.com

Stocks mentioned in the article : Deutsche Telekom AG, AT&T Inc.
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