Alcatel-Lucent is selling-off its enterprise telecoms interests. It is expected that a sale could raise between US$1.5 billion and $2 billion with the most likely buyer being Hewlett-Packard. And it that doesn't work (or if Microsoft and/or IBM don't step into the breach) the company is talking about taking the division to IPO. Martyn Warwick reports.
Alcatel-Lucent is the world's fourth-biggest player in enterprise telecoms but its market share is a mere 8.7 per cent. By comparison, Avaya (ironically, once a part of Lucent) has 21 per cent, Cisco 20.3 per cent and Siemens, now also a shadow of its former self, has 9.3 per cent.
These days Alcatel-Lucent is increasingly focused and reliant on cloud computing and telecoms and has obviously decided that it can now do without things like its switches, IP-PBX, call centre and other enterprise comms equipment.
HP would seem to be the most likely buyer; the company is three years into a 10-year long strategic partnership with Alcatel Lucent and the French-American corporation has been ploughing cash and other resources into HP's networking communications division for quite some time now.
What's more, the purchase of Alcatel-Lucent's enterprise telecoms interests would provide HP with the voice technology and platform with which it could compete much more effectively against arch-rival Cisco.
Alcatel-Lucent's CEO, Ben Verwaayen, has been pulling the company up by its Parisian bootstraps and recent indications are that it will soon post good Q1 figures and perhaps even a profit for the first time in the five years since the companies combined. Furthermore, Alcatel-Lucent's share price has been rising steadily since the beginning of 2011. The company has a major presence in Europe and is stong in many emerging and growth markets around the world but has, as yet, failed to make a real impact in North America.
It has some 78,000 employees in 130 countries worldwide and it recorded revenues of €16 billion for the financial year to December 31, 2010.
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