Motorola, Inc. (NYSE:MOT) announced today it has signed a third generation (3G) contract with ALLTEL (NYSE:AT), making it each company's first 3G contract signed in the United States. The contract is for 3G Code Division Multiple Access (CDMA) 2000 1x standards-based hardware and software, which are scheduled for installation in New Orleans and Baton Rouge, La., in 2001. The financial terms of the deal are not being disclosed. It is the third 3G announcement made by Motorola since Oct. 17.
Motorola's Global Telecom Solutions Sector (GTSS) has begun shipping its 3G-ready SC™ 4812 base stations and other hardware to New Orleans and Baton Rouge, Louisiana's two largest cities. When the 1x system is fully installed, ALLTEL will be able to provide its customers with high-speed wireless packet data services with initial data speeds of 144 kilobits per second.
"This contract with Motorola eventually will provide ALLTEL's wireless customers with high-speed packet data that will be accessible by portable devices," said Chris Smith, executive vice president of Little Rock-based ALLTEL's Network Services Division. "By upgrading our network to 3G, we will be able to offer our customers a whole new array of services that will generate new revenue streams for us," said Smith.
In the future, Motorola and its strategic alliance partners, including Cisco Systems, Inc. (NASDAQ:CSCO) are expected to provide different components of a 3G Internet protocol-based packet data network solution. Motorola, through its strategic alliance with Cisco Systems, Inc. is developing a common, IP-based architecture designed to integrate voice, data and multimedia communications.
"Motorola's total communications Aspira™ solutions and unsurpassed wireless expertise give ALLTEL a lead in the 3G market and allow for a smooth migration to 3G wireless communications," said Fred Wright, senior vice president and general manager of the North America Region for Motorola's Telecom Carrier Solutions Group. "Through our strategic alliances with industry-leading companies, Motorola is working on making the Internet wireless and mobile. To achieve this, Motorola is investing heavily to develop a new generation of products, ranging from core packet switching equipment to network access systems, application servers and smart devices," said Wright.
Motorola expects to begin 1x field trials in the fourth quarter of 2000 and conclude trials in the first quarter of 2001. Commercial software and hardware to allow customer implementation of 1x is expected to be available starting in the third quarter of 2001. Motorola will manufacture 1x compatible handsets and a family of total communications solutions to enhance each CDMA carrier's value proposition in the highly competitive wireless market.
The Motorola 1x solution can be implemented over an existing CDMA network, helping to lower the operator's costs by enabling them to use their existing infrastructure. Many of Motorola's CDMA infrastructure systems are 3G-ready, requiring only a software load and PCU addition, with very few modifications to existing hardware. Offering controlled evolution to 3G mobile communications, the Motorola 1x data solution enables operators to take advantage of many new revenue opportunities.
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