& cplSiteName &

AlcaLu CEO Likes His Product Lineup

Craig Matsumoto
LR Mobile News Analysis
Craig Matsumoto
5/23/2012
50%
50%

SANTA CLARA, Calif. -- Alcatel-Lucent (NYSE: ALU) has all the pieces in place for future growth; it's just that you can't see the results in the quarterly reports, CEO Ben Verwaayen told analysts at the company's annual Technology Symposium.

Speaking in a fireside-chat setup on Wednesday morning, Verwaayen insisted AlcaLu has a solid strategy in place that's dictating all product directions.

But of course, that progress doesn't politely show up once a quarter. Some big fiber-access wins in China, for example, haven't delivered a boost in revenues yet. (See Bad Start to 2012 for AlcaLu.)

What AlcaLu is missing, he contended, isn't the ability to progress but the "capability to do that in a less volatile way than we're doing."



"You could say in the past we were an assembly of products looking for a strategy," Verwaayen said. Now, AlcaLu has an overall strategy, accepted by carrier customers, that all products are adhering to, Verwaayen said. And to simplify the business, the products have been consolidated into three areas: access, core and services.

Service Provider Information Technology (SPIT) is certainly an underlying current, running underneath every product line. (See AlcaLu CEO Unveils New Vision.)

And cloud networking is a major initiative with nicely high margins -- in fact, AlcaLu's CloudBand platform officially launched Wednesday, with Texas-based carrier Transtelco announced as the first customer. (For more about AlcaLu's cloud ambitions, see AlcaLu Unveils Its Carrier Cloud Play.)

But in summarizing the state of the business -- something he was doing off the cuff, in response to a question -- Verwaayen stuck to familiar territory for most analysts, going down the major sectors of the network.

The access business, which looked like a commoditized wasteland two years ago, is hot, thanks to China's buildouts and the advent of higher-speed copper technologies. "China's plan for fiber access is unprecedented, and we are absolutely right in the middle of it," Verwaayen said. (See China Unicom Expands GPON With AlcaLu and AlcaLu Wins China Telecom Broadband Deal.)

In wireless, AlcaLu had some catching-up to do in radio, he said. But the rest of the wireless network, including backhaul, is moving to IP routing and focusing on video delivery. "In that next generation of technology, we have, I think, a better position than many of our competitors do," he said.

AlcaLu's best position might be in the convergence of the optical and IP networks. "We have an opportunity there to dominate," he said.

That's partly because AlcaLu is the only major vendor besides Huawei Technologies Co. Ltd. with a longstanding presence in both optical and IP. But there's also been a change in the market. The "customization frenzy," where every carrier wanted something slightly different in optical, is ending as optical and IP intertwine, he said.

One potential obstacle to AlcaLu's plans is the economy, of course -- particularly the precarious European economy. Verwaayen wouldn't offer any new speculation about what's going to happen there. "If the sky falls, the sky falls," he said.

— Craig Matsumoto, Managing Editor, Light Reading

(13)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
paolo.franzoi
50%
50%
paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 5:32:14 PM
re: AlcaLu CEO Likes His Product Lineup


Unless they announce profit growth why would investors raise stock price?


seven


 

DCITDave
50%
50%
DCITDave,
User Rank: Light Beer
12/5/2012 | 5:32:14 PM
re: AlcaLu CEO Likes His Product Lineup


Simon Leopold's note today mentioned that AlcaLu's stock price is confounding. It doesn't go up no matter what the company announces. Seems more "rethinking" may be in order and that's too bad because the Street doesn't seem to be giving Big Ben credit for all the good he's done so far.


 

macster
50%
50%
macster,
User Rank: Light Bulb
12/5/2012 | 5:32:12 PM
re: AlcaLu CEO Likes His Product Lineup


Indeed. In the near term, we can all understand, given the current climate. In the longer term, some are asking as to what comes next, what comes after mobile broadband, cloud, etc.


On the operator end, there's been noises/grumblings re. subsidies. See link. Vodafone also mentioned billions in subsidies.


http://online.wsj.com/article/SB10001424052748704559904576230143896332886.html


But you are spot on - it does not address revenue growth.

Soupafly
50%
50%
Soupafly,
User Rank: Light Sabre
12/5/2012 | 5:32:11 PM
re: AlcaLu CEO Likes His Product Lineup


It comes down to people been very tired of hearing the same sounds time & again.


The stock price has been punished because of that credibility gap.


Its ironic that the same funds, analysts, inter alia cast that stuck with the "old" A-L team are now punishing the "new" one. The quote marks are because the sequence of failure at the company has been nothing short of scandalous, and the perpetual investor apathy, equally so.


@ Seven; I see your point, but disagree on profit growth. Obviously thats important but the stock has been hammered & marked down for succesive under-performance. If they can stabilise the ship and show that's happening, over any kind of consistent time-frame the price should rise - regardless of profitability or margin %. Why? To correct the over-compensatory "negative" posture some investors adopted. Summary: The stock price of a company is based on more that just profitability.


@ macster; What comes after mobile broadband, cloud?? Facepalm! Your either joking or have to be talking way beyond any timeframe anyone in the industry will credibly comment on. I would guess 5-10 years minimum.


I know of no-one who could or indeed would give you any kind of intelligent reasoned answer on what happens "after" those trends given that we are barely at the start of these revolutions, and their combined impact, has already changed the industry. 


But please, correct me...can you share with us what you think comes after MBB & Cloud?? I am ALL ears.

paolo.franzoi
50%
50%
paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 5:32:06 PM
re: AlcaLu CEO Likes His Product Lineup


Soup,


 


Losses will drive the stock price to 0.  The stock is not underperforming.  The company is.  What I tried to say in a short and sweet way is this:  New products are wonderful but to date they are not delivering profits.  Profits are what matter and the new products are only a means to the end.  There have been so many announcements without profits that nobody will care until they have profit.


 


seven

ecipo
50%
50%
ecipo,
User Rank: Light Beer
12/5/2012 | 5:32:05 PM
re: AlcaLu CEO Likes His Product Lineup


Couldn't agree more!

TGIR
50%
50%
TGIR,
User Rank: Light Beer
12/5/2012 | 5:32:02 PM
re: AlcaLu CEO Likes His Product Lineup


They did deliver profits last year.  Note that they actually have a PE ratio.

paolo.franzoi
50%
50%
paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 5:32:02 PM
re: AlcaLu CEO Likes His Product Lineup



Q1 (Mar '12)2011Net profit margin-8.27%


seven


 

macster
50%
50%
macster,
User Rank: Light Bulb
12/5/2012 | 5:32:01 PM
re: AlcaLu CEO Likes His Product Lineup


Can understand that Q1 is usually weaker than the other quarters, but the drop in revenue and GM is a cause for concern. Then you throw in things like the fact that they're still free cash dlow negative (albeit improving), it's hard to see how their share price can rise. Also don't agree with the sale of their call-centre business.


All this in a time of "revolution". Hence more are asking, what comes next?


Saying that, they do look cheap now.

paolo.franzoi
50%
50%
paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 5:31:55 PM
re: AlcaLu CEO Likes His Product Lineup


 


And from Schwab they have a PEG of less than 1.  That means people think there is risk in the stock.  If you look at a chart over the last 3 years they have lost money in about the same number of quarters as earned it.  Most of their money (about 75% last year) is made in Q4.


To get a better stock price - get earnings EVERY quarter - grow them EVERY year - and eliminate downside risk.  Pretty simple game.  Which ALU does not do.


seven


 

Page 1 / 2   >   >>
From The Founder
Download our complete guide to de-risking NFV deployment in 2016, including:
  • An eight-step strategy to deploying NFV safely, based on input from the companies that have already started virtualizing their production networks.
  • Interviews with leading executives at Colt, AT&T, Deutsche Telekom, Cisco, Nokia, ZTE, Ericsson and Heavy Reading.
  • Flash Poll
    Live Streaming Video
    Prepping for the Future: Upskill U Explained
    During this short kick-off video, Doug Webster, Vice President of Service Provider Marketing, Cisco, and Light Reading’s CEO & Founder Steve Saunders give an overview of Upskill U.
    LRTV Interviews
    Ditching the Slash & the Orchestration Wars

    5|3|16   |     |   (2) comments


    SDN and NFV have been inextricably bound with each other for so long that on a conceptual level, smooshing them together into one catch-all phrase – SDNFV – is now justifiable, according to Dan Pitt, executive director of the Open Networking Foundation (ONF). Light Reading spoke to Pitt at the NFV World Congress, where he explained that the next ...
    LRTV Custom TV
    ZTE TV Connect Highlights

    5|3|16   |     |   (0) comments


    ZTE gives us a tour of its booth and new products at TV Connect in London.
    LRTV Custom TV
    Deluxe's Unified Delivery Solution

    5|3|16   |     |   (0) comments


    Join Alan Breznick of Light Reading and visit the Deluxe booth at NAB! Here you'll find Deluxe's Unified Delivery Solution, OTT video, virtual reality, HDR, 4K and much more!
    LRTV Interviews
    Verizon Puts Gray Boxes in the Shade

    5|2|16   |   04:33   |   (1) comment


    When it comes to the white box trend, "gray" boxes, which have a slight proprietary twist, don't give service providers and end users the advantages they're seeking, according to Verizon's Vice President of Product and New Business Innovation Shawn Hakl.
    LRTV Custom TV
    Dealing With a Disrupted Video Market

    5|2|16   |     |   (0) comments


    Ericsson's Simon Frost discusses how traditional pay-TV providers can cope with the big changes wrought by the rise of OTT video and IP technology.
    LRTV Custom TV
    The VNF Responsibility of Red Hat

    5|2|16   |     |   (0) comments


    At MWC, Caroline Chappell of Heavy Reading visits the Red Hat booth and sits down with Chris Wright to talk about the responsibility the VNF needs to take on in order to ensure the operators get the carrier-grade performance they expect for their network.
    LRTV Interviews
    AT&T Expert on the Key Pillars of UC

    4|29|16   |   03:58   |   (0) comments


    Vishy Gopalakrishnan, AVP of product marketing at AT&T, talks about the three developments that are making unified communications and collaboration secure and reliable for enterprise users.
    LRTV Documentaries
    LRTV Report: Mobile Core Innovation

    4|28|16   |   25:32   |   (0) comments


    Hear from multiple industry experts from Deutsche Telekom, SK Telecom, Heavy Reading, Huawei, Cisco, Ericsson, Nokia, NEC and many more about developments in the mobile core as operators virtualize their IMS and evolved packet core systems and prepare for a 5G world.
    LRTV Huawei Video Resource Center
    NFV World Congress Highlight

    4|26|16   |     |   (0) comments


    The highlight of the NFV World Congress contains exciting telecom news. Join us for an inside look at Huawei's ICT 2020 plan and its latest collaboration with industry leaders.
    LRTV Interviews
    Unified Comms Finds Its Voice

    4|25|16   |   03:44   |   (0) comments


    Peter Quinlan, VP of UCC Product Management at Tata Communications, talks about the evolution of the unified communications and collaboration services sector and how voice is now a big part of current developments.
    LRTV Documentaries
    So... What Do We Do Now?

    4|25|16   |   03:24   |   (0) comments


    After a long hiatus, Max Dingman, the CEO of a GeeGhiz, returns for a motivational board room pep talk.
    LRTV Documentaries
    NAB 2016 Highlights

    4|21|16   |     |   (0) comments


    Light Reading's Cable/Video Practice Leader Alan Breznick climbs down from the slots to tell us about the latest news in broadcast technology at NAB 2016 in Las Vegas.
    Upcoming Live Events
    May 23, 2016, Austin, TX
    May 23, 2016, Austin Convention Center
    May 24-25, 2016, Austin Convention Center, Austin, TX
    September 13-14, 2016, The Curtis Hotel, Denver, CO
    December 6-8, 2016,
    June 16-18, 2017, Austin Convention Center, Austin, TX
    All Upcoming Live Events
    Infographics
    A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
    Hot Topics
    Ultra-Broadband Summit, Hong Kong
    Iain Morris, News Editor, 4/27/2016
    Amazon AWS Reports $2.6B Quarterly Revenue, Up a Colossal 64%
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 4/28/2016
    WiCipedia: Woman Cards & Bitch Switches
    Sarah Thomas, Director, Women in Comms, 4/29/2016
    Sprint CEO: Our Spectrum Is for 5G
    Dan Jones, Mobile Editor, 5/3/2016
    Amazon & Other 'Big 4' Cloud Providers Crushing Competitors
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 4/29/2016
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
    Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
    Animals with Phones
    Sloth Mail Click Here
    Sloth mail -- somehow even slower than snail mail.
    Live Digital Audio

    Of all the tech companies in the Valley, Intel has made the most aggressive commitment to building a diverse and inclusive workplace culture. It's doing so by taking concrete, measurable steps, making a large financial investment and through a commitment to complete transparency about its progress. In this radio show, WiC Director Sarah Thomas will be joined by Shlomit Weiss, Intel's Vice President, Data Center Group, and General Manager of Networking Engineering, who will share with us why Intel is tackling this huge challenge, how and to what effect. She will also discuss her unique experiences leading development of Client SOC development in the past and today leading development of all of the chipmaker's silicon hardware for networking IPs and discrete devices and managing a team of 600 engineers across Israel, Europe and the US.