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Alcatel-Lucent Denied Abandonment of Mobile Device Business
BEIJING, Dec 03, 2008 (SinoCast Daily Business Beat via COMTEX) --
Alcatel Shanghai Bell Co., Ltd., Alcatel-Lucent's flagship company in the Asia-Pacific region, on December 2 denied the rumor about Alcatel-Lucent's abandonment of mobile device business.
Previously, some reports said that Alcatel-Lucent, a well-known global communications solutions provider, would release a strategic restructuring plan on December 12. And at the time, Ben Verwaayen, chief executive officer of the company, will be likely to announce that the company will give up its mobile device business before 2010.
But according to yesterday's statement by Alcatel Shanghai Bell, there is no reason for Alcatel-Lucent to do that. Alcatel-Lucent now captures 45% of the world CDMA market. And it is a leader in the Chinese CDMA market, too. Moreover, it has inked a large number of contracts about TD-SCD, MAWCDMA, and WiMAX.
On top of that, lately, Alcatel-Lucent signed a USD 230-million contract with China Telecom Corporation Ltd. (NYSE:CHA and SEHK: 0728), China's largest fixed-line telephone operator, for cooperation in CDMA mobile communications devices and services. Alcatel Shanghai Bell will provide CDMA wireless Internet solutions for China Telecom in 56 cities of nine provinces all over the country. The new network is expected to start commercial operation at 2008 end.
Alexandre Peterc, an analyst at an investment institution called Exane BNP Paribas, believed that Alcatel-Lucent was unlikely to give up its telecom equipment business, because the company should do well in both fixed-line business and mobile device business if it wanted to maintain its position as a world's leading telecommunications device provider.
Perhaps telecom operators will not continue their partnership with Alcatel-Lucent any more, if Alcatel-Lucent aborts the mobile equipment business, the analyst added. That will do great harm to the company.
Alcatel-Lucent ranks No. 3 all over the world by its mobile equipment business, only next to Ericsson and Nokia Siemens Networks. It is now the world's largest CDMA equipment provider, the third largest WCDMAL equipment provider, and a top WiMAX equipment provider. Last year, the company's mobile equipment sales contributed to 30% of its total sales.
However, from November 2006 till now, Alcatel-Lucent's market value has declined from USD 34 billion to USD 5 billion, and the company has suffered a loss of EUR 4.84 billion. And the company has conducted a lay-off in its CDMA division. Luckily, Ben Verwaayen has once said that the company was expected to become profitable before this December.
(USD 1 = CNY 6.88)
Source: dycj.ynet.com (December 03, 2008)
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