Report: Alcatel-Lucent could exit mobile market - Mobile World Live

Report: Alcatel-Lucent could exit mobile market

28 OCT 2009

A Reuters report today speculates that Alcatel-Lucent’s new CEO Ben Verwaayen could offload the vendor’s mobile infrastructure business as part of a strategic review due to be unveiled on December 12. “The mobile business is too small, they will probably never make any money from this activity,” the news agency cites Bernstein Research analyst Pierre Ferragu as stating. Meanwhile, Thomas Langer of West LB said that Alcatel-Lucent “should exit the mobile market” and focus on “the fixed story: copper to fibre optics, software and integration.” Not all analysts were in agreement though, with at least one – Exane BNP Paribas’ Alexandre Peterc – commenting that disposing of its mobile activities would be “suicidal.”

Alcatel-Lucent has reported seven consecutive quarterly losses, the most recent being its third-quarter loss of €40 million. Ex-BT CEO Verwaayen was named new CEO in September following the departure of non-executive chairman Serge Tchuruk and CEO Pat Russo in July. Russo and Tchuruk left two years after brokering a merger between French company Alcatel and US-based Lucent to create the world’s largest telecoms equipment manufacturer. Reuters notes that abandoning the mobile division would set the seal on the failure of a US$34 billion transatlantic mega-deal that has left the group worth US$5 billion, barely three times the amount it targeted in annual synergies alone. Shares have also lost 66 percent this year after a 55 percent decline in 2007. Verwaayen admitted during the company’s third-quarter results that “profitability remains unsatisfactory.”

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