Lucent Technologies has put up $US90 million of telecommunications gear for auction on Bid4Assets' Web site (www. Bid4Assets.com).
The equipment was left over from a recently completed multibillion-dollar contract with Saudi Arabia to lay down a telecommunications infrastructure for the desert kingdom, said Michelle Davidson, a Lucent spokeswoman. Lucent finished the project as planned but had equipment left over, she explained. The equipment carries a list price of about $90 million.
In the first phase of the auction, which started on August 27 and ended on September 5, equipment for GSM (global system for mobile communications) wireless communications networks and for Class 5 switches for local telephone offices were among the gear on sale. Data-networking equipment, installation materials and some hardware for central offices are among the items slated for auction in the next phase, which was expected to begin on September 17. Multiplexers and digital cross connectors for handling multiple phone lines will be part of the third phase of the auction, which begins on October 1.
Davidson couldn't immediately determine whether Lucent had previously sold equipment at auction like the Bid4Assets sale, but she said Lucent was always looking for ways to reduce inventory levels. It was having some success doing this, she said, citing a $1 billion drop in inventory between the second and third quarters.
Big carriers have cut back on plans to buy new equipment, while failures of smaller carriers and dotcom companies are flooding auctions with lightly used gear at fire-sale prices. Telecommunications equipment makers have thus been hard pressed to reduce their inventories of older gear. However, one analyst said progress is being made.
"I think they're substantially working through it this year," said Lee Doyle of IDC. The over-supply of today is a result of the over-demand of the past few years. "They were trying to provide equipment in a market that was doubling every year," said Doyle.
While Cisco routers have been sold on the eBay auction site by closed dotcoms for pennies on the dollar, the kind of equipment Lucent is putting up for auction isn't as generic, Doyle said.