Good news at Marconi shock

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The Independent Online

Marconi is close to landing one of its biggest orders since the telecoms equipment manufacturer fell to the mercy of its banks, with a £200m-plus deal with Ericsson.

Marconi is close to landing one of its biggest orders since the telecoms equipment manufacturer fell to the mercy of its banks, with a £200m-plus deal with Ericsson.

Due to be signed early next month, the deal could prove critical to Marconi's negotiations with its creditors, which have the power to force the company into administration.

While both companies refused to comment, it is understood Marconi will supply Ericsson with a technology called DWDM that is used in the development of high-speed telecoms networks.

Under the deal, Ericsson will re-sell the technology to its customers, which include BT and Telefonica.

Ericsson had planned to develop its own DWDM offering, but the Swedish company wound up its research and development team this month as part of cost-cutting measures.

Analysts predict a huge market for DWDM, which allows high-speed data transmission along optical fibre networks, because it will be used in the roll-out of third-generation mobile networks.

The deal will feature in Marconi's discussions with its banks and bondholders, which are understood to be weeks from agreeing a £3bn debt-for-equity swap.

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