& cplSiteName &

AlcaLu CEO Likes His Product Lineup

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
Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
Women in Comms Introduction Videos
Cisco: Mentoring Critical to Attract & Retain Women

7|19|17   |   6:40   |   (1) comment


Liz Centoni, senior vice president and general manager of Cisco's Computing System Product Group, shares why mentoring in all its forms is important for women and what Cisco is doing that's made a difference for women in tech.
LRTV Custom TV
Gigabit LTE With Snapdragon 835

7|12|17   |     |   (1) comment


At an event in Wembley stadium, EE used its live network to demonstrate gigabit LTE using a Sony Xperia XZ Premium smartphone with a Qualcomm Snapdragon 835 chip.
LRTV Custom TV
Implementing Machine Intelligence With Guavus

7|12|17   |     |   (0) comments


Guavus unites big data and machine intelligence, enabling many of the the largest service providers in the world to save money and drive measureable revenue. Learn how applying Machine Intelligence substantially reduces operational costs and in many cases can eliminate subscriber impact, meaning a better subscriber experience and higher NPS.
LRTV Custom TV
Unlocking Customer Experience Insights With Machine Intelligence

7|12|17   |     |   (0) comments


When used to analyze operational data and to drive operational decisions, machine intelligence reduces the number of tasks which require human intervention. Guavus invested in Machine Intelligence early. Learn about the difference between Machine Learning and Machine Intelligence.
Women in Comms Introduction Videos
Verizon VP Talks Network, Career Planning

7|12|17   |   4:49   |   (0) comments


Heidi Hemmer, vice president of Technology, Strategy & Planning at Verizon, shares how bold bets and the future of tech define her career.
Telecom Innovators Video Showcase
Masergy's NFV Journey

7|11|17   |     |   (0) comments


Ray Watson, vice president of global technology at Masergy, discusses the advantages and challenges in entering the still-maturing NFV market for the past three years.
Telecom Innovators Video Showcase
Mavenir on RCS Cloud Platform & Multi-ID

7|10|17   |     |   (0) comments


Guillaume Le Mener, head of marketing and corporate development at Mavenir, discussed RCS and the recent launch of Multi-ID, which supports T-Mobile's DIGITS, the revolutionary new technology that breaks down the limitation of one number per phone and one phone per number.
LRTV Custom TV
ADTRAN Executive Outlines Trends in Next-Generation 10-Gigabit Cable Networks

7|10|17   |     |   (0) comments


Hossam Salib, VP of Cable and Wireless Strategy at ADTRAN, outlines key trends as MSOs begin to deploy next-generation Gigabit and 10-Gigabit cable networks. In the interview, Hossam outlines the advantages of a Fiber Deep architecture, FTTH options including EPON and RFoG, and the importance of SDN and NFV in building next-generation high-bandwidth cable networks.
LRTV Interviews
Global Capacity: Bandwidth Demand Driving Ethernet Growth

7|6|17   |   6:37   |   (0) comments


At Light Reading's Big Communications Event in Austin, Texas, Global Capacity's VP of Marketing Mary Stanhope talks about how the demand for bandwidth is changing the way service providers deliver broadband services.
LRTV Interviews
Colt's Services Chief on Digital Delivery

7|5|17   |   16:12   |   (0) comments


Rogier Bronsgeest, the chief customer experience officer (chief CEO!) at Colt, discusses the way in which the service provider interacts with its customers these days and his aggressive net promoter score (NPS) targets.
Women in Comms Introduction Videos
BT VP: Women Should Fill Security Talent Gap

7|5|17   |   6:00   |   (2) comments


By 2020 there will be six security jobs for every qualified worker, and Kate Kuehn, vice president of Security for BT in the Americas, says BT wants to encourage women to fill the shortage in jobs.
LRTV Interviews
Colt Sales Exec on Services Trends

7|4|17   |   12:59   |   (0) comments


Colt's sales director for enterprise, James Kershaw, sheds some light on the services currently in demand and how network upgrades are influencing customer demand.
Upcoming Live Events
September 28, 2017, Denver, CO
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Royal Garden Hotel
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Mobile to Power Online Video Consumption – Zenith
Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation, 7/19/2017
Can Mushroom Sprout in Crowded SD-WAN Field?
Carol Wilson, Editor-at-large, 7/18/2017
AI Will Be Ubiquitous in 2020 but Overhyped in 2017 – Gartner
Sarah Thomas, Director, Women in Comms, 7/18/2017
Comcast Accelerates Into 15 IoT Markets
Mari Silbey, Senior Editor, Cable/Video, 7/18/2017
BBC Head: We Must Reinvent Broadcasting for a New Generation
Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation, 7/21/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.