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Lucent Takes the Gloves Off

Light Reading
News Analysis
Light Reading
12/12/2001

Lucent Technologies Inc. (NYSE: LU) is getting scrappy, clawing its way back into some incumbent business, to judge from some recent activity.

Lucent has won two telecom equipment deals in recent weeks, a metro optical networking whopper with Verizon Communications Inc. (NYSE: VZ) and a smaller digital loop carrier contract with Bell Canada. Lucent hasn't announced or commented on either deal, but the news signals that despite its ongoing reorganizing, the telecom giant is serious about pricing to win and hitting up large carriers for more business.

The first new deal is said to be a three-year agreement for Lucent to provide Verizon with metro optical networking gear, according to two industry analysts close to Lucent. The deal is a significant win for Lucent, though its value is hard to pin down. An earlier report by TheStreet.com put the contract as high as $1 billion. Light Reading's sources say it could be as low as $100 million or as high as $500 million.

"You didn't get a comment from us last week and you're not going to get one this week, either," said Wendy Zajack, a Lucent spokeswoman.

Whether Lucent talks or not, a deal between it and Verizon is hardly surprising, given the two companies' close relationship. Sales to Verizon accounted for about 17 percent and 14 percent of Lucent's revenues in the years ended September 30, 2001 and 2000, respectively.

Earlier this year, Verizon bought Lucent's WaveStar TDM gear for a network deployment in metropolitan New York. That buildout also included Lucent's OC3 (155 Mbit/s) and OC12 (622 Mbit/s) Sonet add/drop multiplexers.

More surprising was a recent revelation that Lucent has beaten Advanced Fibre Communications Inc. (AFC) (Nasdaq: AFCI) and Alcatel SA (NYSE: ALA; Paris: CGEP:PA) in a contest to provide digital loop carrier equipment to Bell Canada. That deal was revealed by the analysts at Deutsche Bank, who cited sources at Bell Canada in a note to clients last week. Analyst George Notter, the report's primary author, writes that the deal is estimated to be between $30 million and $45 million annually.

The analyst note also mentioned an anecdote that Lucent recently knocked 50 percent off the price of its Stinger DSLAMs in order to get Bell Canada to consider giving it some of the DSLAM business it had been giving Alcatel.

While the progress with big carrier customers is a positive for Lucent, the price slashing may only irritate investors who worry that Lucent's profit margins are dropping too fast.

Lucent shares were down $0.20 (2.56%) to $7.61 in early afternoon trading Wednesday.

- Phil Harvey, Senior Editor, Light Reading
http://www.lightreading.com

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WolfLarsen
WolfLarsen
12/4/2012 | 7:27:06 PM
re: Lucent Takes the Gloves Off
Nope, false alarm ....
HarveyMudd
HarveyMudd
12/4/2012 | 7:27:05 PM
re: Lucent Takes the Gloves Off
It is an absolute fact that Lucent has the most reliable Telecom gear that can address the legacy equipment and the most modern systems that anyone can ecpect.

Thre is no other vendor that even comes closer to the richness and fulness of the Lucent Gear. This is true of any segment of the telecom service provider (e.g., Optical gear, Switches, DWDMs, Metro equipment.

The real problem with Lucent is being overstaffed to the tune of about 30%. Lucent has not yet implemented the workforce reduction it announced earlier. It s inability to reduce the workforce is cosing almost a billion dollars year.
prefer_to_lurk
prefer_to_lurk
12/4/2012 | 7:27:04 PM
re: Lucent Takes the Gloves Off
"It is an absolute fact that Lucent has the most reliable Telecom gear that can address the legacy equipment and the most modern systems that anyone can ecpect.

Thre is no other vendor that even comes closer to the richness and fulness of the Lucent Gear. This is true of any segment of the telecom service provider (e.g., Optical gear, Switches, DWDMs, Metro equipment."

Really ? Ever hear of a company called Nortel Networks ? How about Alcatel ?

ptl


Belzebutt
Belzebutt
12/4/2012 | 7:27:04 PM
re: Lucent Takes the Gloves Off
It is an absolute fact that Lucent has the most reliable Telecom gear that can address the legacy equipment and the most modern systems that anyone can ecpect.

We finally know who Harvey is working for!
opticaltalent
opticaltalent
12/4/2012 | 7:27:04 PM
re: Lucent Takes the Gloves Off

So what do you do for Lucent?
Route495
Route495
12/4/2012 | 7:27:03 PM
re: Lucent Takes the Gloves Off
That explains Harvey's spending most of the day surfing on LR. It also explains his bitchin about foreign H1 workers.

--

So what do you do for Lucent?
WDMer
WDMer
12/4/2012 | 7:27:01 PM
re: Lucent Takes the Gloves Off
First, he aint working 4 LU, as he wudnt suggest layoffs as a solution for LU, might be first one to go..!
There is some truth in Harvey's opinoun. However
hard u want, u just cant wish Lucent away.
After massacare at NT and hyped up false marketing
claims by CSCO, LU with its lambda* and metropolis* product family looks much safer and positioned to come out clean in 02.

my $0.02
lu-alum
lu-alum
12/4/2012 | 7:27:00 PM
re: Lucent Takes the Gloves Off
Come on give me a f***ing break. I worked there for quite a while and while it's true that the 5E, the SLC products and low speed sonet gear are extremely reliable, they are also old. In terms of Data gear (where I worked) I can tell you that 80% of what Lucent has is crap. Their DWDM gear pales to companies like Ciena and even lowly Nortel. Their ATM solutions are running on fumes and their recently acquired technology, Nottabit, Chromatis, and Ignitus are largely cancelled or on again off again like the Nottabit router.

As far as traditional gear, Fujitsu kicked their asses in SONET gear and Tellabs ate their lunch in the DACS market. Good for them if they got a deal with Stinger by giving it away, but I've seen that movie and I know how it ends.
optigirl
optigirl
12/4/2012 | 7:26:59 PM
re: Lucent Takes the Gloves Off
One of the things that might happen here is that Lucent sells the stuff at cost, which locks other companies out of the account and then turns around and sticks it to the customers on servicing revenues. (See IBM)

You don't have to be the best, just the biggest. It also helps when you are part of the ol' boy network and everyone has known each other for years. LU and NT know the operations side of the house and since there is such a large embedded base anyway, they will get a seat at the bargaining table no matter what.

Combine all of this with lowered expectations, firing tens of thousands of employees and you can do it the Lucent way....


}:-(
Daveman
Daveman
12/4/2012 | 7:26:58 PM
re: Lucent Takes the Gloves Off
Lucent hasn't done a lot in the Metro DWDM space yet... but I hear they are coming out with a switch called EON which is the backbone of the unannounced Verizon deal. Scuttle-butt from my sources is that this deal isn't supposed to be announced until March (at some industry show) and the deal is rumored to be 1.8BB... according to the rumors I listen to.

I do hear that the DMX switch is begining to replace a lot of the Cisco 15454 gear due to Network Management problems,,, scaling issues, etc. Lucent seems the under-dog in most the optical networking gear with NT the one to beat. LU thrives in much of the legacy business... Circuit switches, DACs, Sonet muxing, etc. DSL is a strong spot for LU but who is sure where that is going? The DLC business is their's to loose. I can't even begin to think of the numbers of Anymedia Fasts out there... Core ATM is on the outs once again but it seems to have some life - another plus for Lucent.

If LU can become the contender for optical leadership in 2002 and comes out with some strong IP/MPLS products... I'd say LU is a serious top contender... They are a "Show Me" company for now...
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