Lucent quits Euro GSM: Official

NEWS Lucent has announced that it will quit the European GSM business, confirming widespread speculation. Chairman and CEO Henry B Schacht told a web conference that the company will abandon new business in the European GSM space, as predicted by silicon.com. "We will continue to support our existing GSM customers, but our focus is now on spread spectrum networks, CDMA and UMTS," he said. The company will also continue to invest in developing technologies for what Schacht called 'circuit to packet' technologies, such as EDGE. "We think this is a particular strength of ours," he said. The news is part of a dramatic downsizing and restructuring designed to get the billion-dollar loss-making company back on its feet. Lucent will now focus on its 30 largest customers, which provide 75 per cent of Lucent's revenue. While spending on 2G GSM networks is predicted to remain strong, the big European telecoms players, which Lucent is targeting, will not be among the largest spenders on new infrastructure. Lucent is also planning to restructure its business to separate the wireline and mobile businesses, reflecting what it sees as a trend in the market. Schacht said the company plans to have a positive cash flow by 2002, and meet industry-standard growth figures of 10-12 per cent per year. Its target is to have a 35 per cent margin by 2003.