Alcatel-Lucent strategy: Focus on third-party access

Alcatel-Lucent has announced job cuts and predicts a decline in global telecom spending of between 8 and 12%, which is much larger than any dip we can see based on any credible set of economic trends.

The forecast appears to be based on the presumption that the recession will continue not only through 2009 but through 2010 as well, since only that outcome would create such a broad suppression of spending.

The good news is that Alcatel-Lucent has targeted the strategic issue we believe has the greatest credibility: the linking of network assets to over-the-top players in what is popularly called “third-party access.” If they play strongly here, they stand to gain considerably, and even more so should the market conditions get as bad as they expect.