Light Reading
The right pieces are in place, even if the results don't show up in quarterly earnings yet, Alcatel-Lucent CEO Ben Verwaayen says

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
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   >   >>
Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Custom TV
Razorsight Expert's Advice on Real-Time Analytics

11|27|14   |   1:43   |   (0) comments


Razorsight's powerful cloud-based Predictive Analytics solutions are used by the world's leading communications and media brands to drive smarter decisions, enable faster actions and optimize outcomes. Get expert advice.
LRTV Interviews
From 4G to 5G: Alcatel-Lucent's Dave Geary

11|25|14   |   09:09   |   (1) comment


Dave Geary, President of Wireless at Alcatel-Lucent, talks about the evolution of the 4G market, small cells, partnerships, 5G and the IoT.
LRTV Huawei Video Resource Center
Building a Secure Telefonica Network With Huawei's High-End Firewall

11|24|14   |   4:37   |   (0) comments


Andrew Davies, IP architect of the Telefonica, a leading digital communications company, discusses the Huawei security gateway solution and putting the solution into the testbed.
LRTV Huawei Video Resource Center
Huawei Partners with Spirent to Verify CE12816's 10GE Port & TRILL Networking Capabilities

11|24|14   |   2:50   |   (0) comments


Spirent Communications is the world's leading supplier for telecom testing appliances and solutions. Spirent has been in a close partnership with Huawei for a long time.
LRTV Huawei Video Resource Center
Saudi Airlines & Its ICT Transformation

11|24|14   |   2:07   |   (0) comments


In this video, Saudi Airlines discusses its network problems and how Huawei's Agile Network is its all-in-one solution.
LRTV Huawei Video Resource Center
Huawei's Agile Switch Benefiting Saudi Arabia's Yamamah Hospital

11|24|14   |   2:40   |   (0) comments


Saudi Arabia's Yamamah Hospital speaks about how Huawei's Agile Switch has improved the medical service's network infrastructure.
LRTV Huawei Video Resource Center
FanPlay & Huawei Build a Wireless Agile Smart Stadium

11|24|14   |   2:13   |   (0) comments


FanPlay is a cloud-based white label service, which is effectively a football fan engagement platform underpinned by mobile payment technology.
LRTV Huawei Video Resource Center
Building an Agile Stadium

11|24|14   |   3:54   |   (0) comments


Stadiums may be thousands of tons of concrete and steel, but they now need to be agile. Being at the stadium may not be as alluring as it once was. Sports franchises and stadium operators discuss how to get fans back.
LRTV Huawei Video Resource Center
Huawei Helps ChinaCache Tackle Challenges in the Internet Industry

11|24|14   |   3:09   |   (0) comments


ChinaCache is China's largest content distribution network supplier. Huawei's CE12800 has provided ChinaCache with very strong support in its establishment of an infrastructure network.
LRTV Huawei Video Resource Center
Cefinity on Managed Security Services & Next-Generation Firewall

11|24|14   |   7:05   |   (0) comments


Cefinity is a cloud management service provider in Southeast Asia. Ivan Zhang, CEO of the company, discusses the implementation of security service management in the cloud era.
LRTV Huawei Video Resource Center
Huawei's Agile Gateway in the Eyes of Cefinity

11|24|14   |   2:11   |   (0) comments


Cefinity is a managed service provider for enterprise networks. The company currently uses Huawei's AR series routers for the most complete range of functions. CEO Ivan Zhang speaks about the advantages of the AR series routers.
LRTV Huawei Video Resource Center
CTO of Bus-Online Talks About Huawei's Agile Gateway

11|24|14   |   2:53   |   (0) comments


Bus-Online covers around 100 million users everyday. In addition to providing mobile TV, and advertising services to the public, Bus-Online has also entered the field of mobile Internet.
Upcoming Live Events
December 2, 2014, New York City
December 3, 2014, New York City
December 8-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
April 14, 2015, New York City, NY
May 6, 2015, McCormick Convention Center, Chicago, IL
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
Irish Telecom outlines the rise of VoIP technology, including its adoption within businesses and their perception of its quality.
Hot Topics
Eurobites: Net Neutrality Battle Looms
Paul Rainford, Assistant Editor, Europe, 11/27/2014
Net Neutrality Even Mark Cuban Could Love
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/26/2014
Why 5G Is a Different Beast
Robert Clark, 11/26/2014
New Juniper CEO Can Be Thankful for $14.5M
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/25/2014
Amazon Eyes Ad-Supported Video – NY Post
Mari Silbey, Independent Technology Editor, 11/25/2014
Like Us on Facebook
Twitter Feed