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Alcatel-Lucent

May 16 2008   9:16PM GMT

Alca-Lu ponders how to recover its position



Posted by: Tom Nolle
Alcatel-Lucent, Telecom

Alcatel-Lucent is asking shareholders to amend the rules for dismissing the CEO or chairman, which would make it easier for the company to shed current CEO Pat Russo. Russo’s position has been deteriorating with the company’s stock price and financial performance, and many inside ALU and outside believe that a major shakeup in management, needed to improve the company’s position, would have to start with Russo. We’ve noted for some time that Russo was less than the ideal candidate for the times, but one challenge that ALU would face should she be removed is whether anyone, at this time, could do much better. While Alcatel-Lucent has enormous strategic strengths and a strong customer position, it has also created a somewhat dysfunctional organization with the merger, and much of the strategic thinking that characterized the company in the past has been diluted by a combination of organizational change and tactical focus. We believe there are steps ALU could take to recover its position, and even to do so within a year, but they would be bold steps of the type that neither a sales-driven CEO like Russo nor a new figure in the role would be likely to take.

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Mar 13 2008   3:04PM GMT

AT&T bids out GPON-based FTTH



Posted by: Tom Nolle
AT&T, GPON, Alcatel-Lucent

AT&T is working through its bidding process for GPON-based FTTH for new developments, a move that takes the company further down the path Verizon has already taken. It is not known how much of the Verizon architecture AT&T will mimic, and in particular if it will use the same linear RF broadcast TV delivery program over its own channel-slot Microsoft TV approach. How this plays out will be of enormous importance to equipment vendors because the decision to use FTTH and PON in any form bends the budget decisively toward the access network and empowers players like Alcatel-Lucent who can bid there. The fact that GPON empowers Alcatel-Lucent has been the seed of the internal battle between the GPON group and the router group, who don’t want broadcast over fiber at all.

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Feb 12 2008   2:39PM GMT

Proposed deals verify mobile angst



Posted by: Tom Nolle
Telecom, Motorola, Alcatel-Lucent, Mobile

Regarding the Alcatel-Lucent/NEC deal and the rumored Motorola-Nortel deal, these developments are symptoms of the angst in the mobile infrastructure market, the slowing of investment in infrastructure that is accompanying a lack of convincing growth in ARPU, and concerns about regulatory shifts and voice pricing. The vendors are looking for something to hang their future revenue model on, as well as to reduce costs and pull back their exposure to the mobile market. More of this sort of thing, and other activities related to the overall mobile infrastructure challenges, can be expected through this year and into 2009.

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Feb 8 2008   2:26PM GMT

Alcatel-Lucent losses indicate management change?



Posted by: Tom Nolle
Alcatel-Lucent, Ip/tv, Metro Area Networks

Alcatel-Lucent posted another loss, warned on the current quarter, and suspended dividend payments, all of which will almost certainly lead to a management shakeup. The company is suffering under a mobile spending slump that has also hurt some of its competitors, and is unlikely to lift for the balance of 2008. Despite the publicized success of its IPTV strategies, it has also been unable to make the revenue shortage up with broadband success, and there is now indication that it’s shifting strategies to a more generalized access and metro strategy that would offer lower-cost deployment. Recent emphasis on DSL and PON are examples of this trend. We believe the company has little chance of pulling out of the current slump in 2008 even with a management change, and that some major restructuring and cost-cutting will be forthcoming

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