Marconi's high-speed technology secures £600m Internet tie-up with BellSouth

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The Independent Online

Marconi, the technology rump of the former GEC, has sealed its biggest ever US deal in a billion dollar tie-up with cable giant BellSouth.

Marconi, the technology rump of the former GEC, has sealed its biggest ever US deal in a billion dollar tie-up with cable giant BellSouth.

More than a million BellSouth customers in nine US states will get their telephone, TV and Internet services using Marconi's high-speed data technology, in a deal worth £600m over the next three years, Marconi said yesterday.

The announcement proved a huge fillip to Marconi's share price, which rose 47p to 970.5p. Analysts said the tie-up could well be the first of many, as US carriers warmed to Marconi's new technology.

The contract is the first tangible result of GEC's purchase of two US firms in the spring. It bought equipment maker Reltec in March for £1.3bn and telecoms company Fore Systems for £2.8bn a month later, and both collaborated on the high-speed access platform to be introduced by BellSouth.

Marconi Communications chief executive Mike Parton said that the company was extremely proud of having earned the BellSouth business. "This contract is a clear demonstration that the acquisitions of Reltec and Fore are beginning to bear fruit and that our integration programme is achieving success."

The deal extends a four-year relationship between BellSouth and Marconi in the US.

The new broadband technology will give BellSouth's Internet users much faster downloading and transmitting, and opens up the possibility of video conferencing and easier e-commerce. The product is six months earlier to market than had been anticipated by analysts. "The whole broadband access market is hotting up in the US and all the carriers are positioning themselves," said one observer. "It is interesting BellSouth has chosen this more advanced technology, because now there is little reason for customers to upgrade."

Marconi hopes to clinch similar US deals and then bring the technology to Europe.

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