Hope springs eternal for Alcatel/Lucent deal

NEWS Alcatel's chief executive has not ruled out future talks with Lucent as it continues its expansion into US markets. Serge Tchuruk told an audience at the Wall Street Journal's CEO Summit that he still intends to build up the company's US business, either from within or through acquisition. "We've turned the page [with Lucent], but I have been long enough in this industry not to say never." Personality and culture clashes between the French and American companies are said to be behind the failure of the $23bn merger talks. However, Tchuruk claimed that despite the economic downturn, now was not the time to curtail investment. "The worst thing that can be done in a slowdown is to change the course of the company. If a company does a 180-degree change because of a short-term outlook, then that is bad and you're stupid." Alactel has to act quickly to put measures into place to weather out the crisis, said Tchuruk. Part of the company's vision is to tap into central and Eastern European markets. "We see substantial growth in those areas. Investment in infrastructure in countries like Russia is still a small fraction compared to countries in Western Europe, but we see the environment stabilising and the economic climate is more predictable." Job cuts could form part of the company's cost-reduction plan, designed to help "weather out the crisis". However, Tchuruk would not be drawn on how many job cuts, or when.
"You can't just wake up one morning and present a list to employees," he reasoned. Alcatel's network management and integration services business will also come under scrutiny in the coming months. It currently accounts for 10 per cent of sales but, predicted Tchuruk, this will rise to one-third of all Alcatel sales in the future. "Over the next few years, customers will leave the architecture of networks to the vendors and this is where we're trying to position ourselves."