With questions swirling about the future of Nortel Networks' UMTS division, the Canadian vendor announced a major 3G and high-speed downlink packet access upgrade contract with France's Bouygues Telecom.

The five-year contract will see the UMTS gear installed in a footprint covering four of Bouygues' six operating regions. The deal vindicates Nortel, which has been the French carrier's primary supplier of GSM, GPRS and Edge equipment, but failed to win part of Bouygues' UMTS contract in 2003, losing out to Ericsson, Siemens and Alcatel. Nortel did not name any financial details of the contract, though it said it would be a five-year contract and the first networks would go live in early 2007. That launch date will just meet the deployment deadlines of French regulators, stipulating all French operators must have UMTS service in 20% of their footprints or risk losing their UMTS licenses.

Nortel now has a strong 3G foothold in France, supplying UMTS infrastructure to two of the three major 3G license holders, Bouygues and Orange France, which have subscriber bases of about 8 million and 22 million customers respectively. It has also announced UMTS/HSDPA deals with Korean providers SK Telecom and KTF through its joint venture with LG Electronics as well as smaller contracts with Partner Communications in Israel, and EDGE Wireless in the U.S. Austria's Mobilkom and Vodafone Spain have also conducted trials of the same technology.

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