Light Reading

AlcaLu Shrinks Its Managed Services Unit

Ray Le Maistre
4/29/2013
50%
50%
Repost This

The ongoing review of Alcatel-Lucent's managed services deals has resulted in a headcount reduction of thousands and the cancellation of a number of contracts, said CFO Paul Tufano during the vendor's first-quarter earnings conference call Friday. The company announced a review of its managed services engagements in July 2012, with the aim of cutting costs and increasing margins. At the time, Tufano noted that 25 percent of AlcaLu's 68 managed services deals would either be renegotiated, exited or not renewed when the initial contract period expired, and that 15 deals were under review. (See Alcatel-Lucent Could Exit 25% of Services Deals.) By the end of March, AlcaLu had "addressed 10 of the 15" deals identified last July, noted Tufano on Friday. Some have been exited, while others are in the process of renegotiation or termination, resulting in a headcount reduction of 3,200 from the Managed Services business unit during the first quarter of this year. In total, Alcatel-Lucent reduced its staffing levels by 5,400 during the first three month of 2013. But that doesn't mean the vendor isn't seeking new business. Tufano said that the company is now focused on signing professional services deals related to network transformation projects, while deals based on network operations and maintenance are out of favor. (See Euronews: AlcaLu Scores at KPN, Alcatel-Lucent Wins $1B Deal in India and Alcatel-Lucent Wins Managed Services Deal.) The overall impact of the new focus is likely to be lower managed services revenues but higher margins, with Tufano confirming that the review process will ultimately result in the loss of deals worth about €400 million ($523 million). During the first quarter, AlcaLu's managed services unit generated revenues of €204 million ($267 million) and reported an operating loss of €5 million ($6.5 million). If the company's contract evaluation strategy is the right one, the managed services unit should soon start reporting positive operating income on a quarterly basis. Now it's the turn of AlcaLu's other business units, particularly Networks & Platforms, to come under scrutiny. (See Alcatel-Lucent CEO Preps Kill List.) CEO Michel Combes declined to elaborate on any early thoughts he may have about the vendor's future, saying only that he will share his views and decisions with staff and investors in the early summer and that he is focused on growth and performance. — Ray Le Maistre, Editor-in-Chief, Light Reading

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Ray Le Maistre
50%
50%
Ray Le Maistre,
User Rank: Light Sabre
4/30/2013 | 8:21:33 AM
re: AlcaLu Shrinks Its Managed Services Unit
lower costs, better margins and the chance to survive.

NSN Maintains Momentum

http://www.lightreading.com/bl...
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
4/29/2013 | 3:01:39 PM
re: AlcaLu Shrinks Its Managed Services Unit
What's the success metric for NSN?
Ray Le Maistre
50%
50%
Ray Le Maistre,
User Rank: Light Sabre
4/29/2013 | 2:32:23 PM
re: AlcaLu Shrinks Its Managed Services Unit
Not one Huawei needs to think about too much currently but one it needs to keep in mind.
In the meantime, NSN appears to have turned around its fortunes with this approach and ALU's managed services division looks like it has improving operating results as a result of its re-focus.
Now let's see what happens to the rest of the company!
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
4/29/2013 | 1:23:06 PM
re: AlcaLu Shrinks Its Managed Services Unit
I wonder what Huawei thinks of the "success through shrinkage" strategy.
Flash Poll
LRTV Custom TV
Optimizing SDN & NFV Architectures Through Application Awareness

4|23|14   |   6:24   |   (0) comments


Jerome Tollet, CTO at Qosmos, explains how network equipment vendors and operators deploying SDN and NFV can take advantage of network intelligence delivered by DPI to strengthen products and services.
LRTV Custom TV
Wind River Demonstrates Carrier-Grade Software for NFV

4|22|14   |   5:00   |   (0) comments


Wind River VP of Product Management, Glenn Seiler, takes a look the industry's first and only complete NFV software platform designed specifically for the unique carrier-grade and high-performance needs of telecom networks.
LRTV Documentaries
Cable Eyes Big Technology Shifts

4|16|14   |   03:02   |   (4) comments


US cable engineers are facing a lot of heavy lifting in the coming years, notes Light Reading Cable/Video Practice Leader Alan Breznick.
LRTV Custom TV
Maximizing Customer Experience & Assuring Service Delivery in an IP World

4|15|14   |   4:57   |   (0) comments


Steven Shalita, VP of Marketing, NetScout Systems, Inc., discusses the challenges cable/MSO operators face in assuring the delivery of new IP-based services. Key points include the value of proactively managing performance, and using rich analytics and operational intelligence to better understand service and usage trends, make smarter business decisions and ...
LRTV Documentaries
Bye-Bye DVD: Consumers Embrace Digital Video

4|10|14   |   04:17   |   (7) comments


Veteran video analyst Colin Dixon, founder and principal analyst of nScreenMedia, says research shows 56% are using digital video already.
LRTV Documentaries
Video: TW Cable Puts Multicast Gateways to the Test

4|8|14   |   04:13   |   (1) comment


Tom Gonder, a chief architect at Time Warner Cable, explains how its trial of multicast gateways is impacting IP-based video plans.
LRTV Custom TV
Managing & Monetizing Big Data in Operator Environments

4|7|14   |     |   (1) comment


At Mobile World Congress, Gigamon's Director of Service Provider Solutions, Andy Huckridge, and Heavy Reading Analyst Sarah Wallace discuss the 'big data' issues facing carriers and operators today.
LRTV Huawei Video Resource Center
Data Center Energy – Build Your Data Center in a Modular Way

4|7|14   |   2:13   |   (0) comments


Dr. Fang Liangzhou, VP Network Energy Product Line, shared his thoughts about the challenges for data centers during CeBIT 2014.
LRTV Huawei Video Resource Center
Agile Network Solution – An Overview of Huawei's Agile Network Solution

4|7|14   |   2:31   |   (0) comments


Ajay Gupta, Director of Product Marketing, Networking Product Line, gives an overview of the Agile Network Solutions during CeBIT 2014.
LRTV Huawei Video Resource Center
Huawei’s eLTE Voice Trunking, Video and Data Applied for Railways

4|7|14   |   1:38   |   (0) comments


Gottfried Winter is the Sales Director at Funkwerk, a German specialist in GSM-r terminals and a long-time partner of Huawei. At CeBIT 2014, Winter talks to Light Reading about this partnership and the integration of enhanced voice trunking, video and data functions.
LRTV Huawei Video Resource Center
LeaseWeb Speaks Highly of Huawei's Datacenter Products

4|7|14   |   1:37   |   (0) comments


Rene Olde Olthof, Operations Director LeaseWeb, talks about the next data center transformation during CeBIT 2014.
LRTV Documentaries
Comcast: Reshaping the Cable Network Architecture

4|3|14   |   07:11   |   (8) comments


Shamim Akhtar, Comcast's architect and senior director of network strategy, explains why the cable company is moving to a more distributed network architecture.
Today's Cartoon
Hot Topics
WhatsApp Threatens Carrier VoLTE
Sarah Reedy, Senior Editor, 4/18/2014
The Hungry, Hungry Cloud
Dan Jones, Mobile Editor, 4/22/2014
Who's Ready to Play Broadband?
Carol Wilson, Editor-at-large, 4/21/2014
What's the Magic of Private Equity?
Carolyn Mathas, 4/22/2014
AT&T Turns Up Gig Heat in 21 New Metros
Dan Jones, Mobile Editor, 4/21/2014
Like Us on Facebook
Twitter Feed