Alcatel-Lucent inks Qualcomm tie-up, reports weak Q2 – Mobile World Live

Alcatel-Lucent inks Qualcomm tie-up, reports weak Q2

30 JUL 2013

Alcatel-Lucent announced a partnership with Qualcomm to work on small-cell technologies, as the troubled infrastructure vendor also reported an increased loss for the second quarter of 2013.

The companies will work together to develop small cell base stations “that enhance 3G, 4G and Wi-Fi networks” in enterprise and residential settings.

In a statement, it was said that this will be delivered through joint investment in a strategic R&D programme, with the spend “shared between Alcatel-Lucent and Qualcomm.”

The Financial Times reported that Qualcomm is to “acquire a small stake” in Alcatel-Lucent, although this will take place slowly and remain below the 5 per cent disclosure threshold – indicating more of a symbolic move rather than a strategic or financial one.

According to Bloomberg, the infrastructure vendor is seeking “three to five” partners to make similar investments, with an ownership stake of less than 5 per cent combined.

Separately, Alcatel-Lucent reported a loss for the second quarter of €885 million, compared with a prior year loss of €396 million, on revenue of €3.61 billion, up 1.9 per cent.

According to Bloomberg, analysts had been expecting a drop in sales.

Sales in its Wireless unit of €1.01 billion were down 1.1 per cent year-on-year from €1.02 billion.

The company said that trends from the first quarter continued into the second, where strong growth in sectors such as LTE were offset by a decline in 2G/3G technologies.

Its CDMA revenue now represents “approximately 20 per cent” of total wireless revenue, and for the first time was surpassed by LTE revenue, as the US continues to drive growth in 4G.

Alcatel-Lucent said that its net loss included €194 million of restructuring charges, an impairment charge of €552 million related to a review of its assets in line with ‘The Shift Plan’, and €180 million of financial losses.

The company also set that its net debt had increased to €794 million from €358 million at the end of the prior quarter, which was attributed to a number of factors including working capital requirements, restructuring charges, and interest paid.

Michel Combes, CEO of the company, said: “We are at the beginning of our journey towards 2015 and cash remains a challenge. Looking ahead, our clear focus will be maintaining a strict and disciplined approach to implementing ‘The Shift Plan’ across all of its industrial, operational and financial dimensions.”

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