LONDON — Newly installed Alcatel-Lucent CEO Ben Verwaayen will unveil his much anticipated plans to turn the company around later this week, but even before he outlines his plans, will strongly refute any suggestions the company had ever planned to quit the mobile infrastructure segment.
The joint venture, which has posted seven straight quarters of losses, has been pressured by investors to cut its wireless business loose. But Verwaayen is expected to stress Friday (Dec. 12) the company will keep its research and development and will be ready with LTE products.
There has been much speculation over the past few weeks amongst analysts whether Alcatel-Lucent's prospects would be improved by going wireline-only and exiting a business where it takes a distant third place to Ericsson and Nokia Siemens.
Verwaayen, who oversaw a major turnaround at BT, will stress the company has no intention to quit wireless, but could make major cutbacks in this division, especially in the CDMA market, where it is a clear market leader, but where it is seeing rapid decline in demand and margins.
"It is not true we are leaving mobile," Verwaayen told Reuters . "Not doing innovation is like shooting yourself in the head. We are not going to cut our lifeline to the future."
He said one of his first conclusions on joining ALU in September — "on day two" — was to focus efforts on becoming a leader in LTE, the 3GPP-backed Long Term Evolution path in cellular, and said only three other companies could support an end-to-end wireless model — Ericsson, Nokia Siemens Networks and Huawei.
His plans are expected to stress the company will focus its efforts and its new investments in a more targeted way than in the past, putting LTE at the center of its initiatives and relying on its $6 billion in cash mountain to tide it over the waiting period for widespread LTE deployment, hoping to emerge as a leading supplier by 2010 and beyond.
Related Articles
Analysis:Alcatel-Lucent could dump mobiles to end pain
Alcatel-Lucent CFO quits
Alcatel-Lucent confirms top executive changes
13%
15%
38%
12%
23%
