Pressure Grows on ALU
Alcatel-Lucent (NYSE: ALU) saw its stock slip 2.8 percent to €7.01 (US$9.90) on the Paris stock exchange Friday morning following media reports that it has lost some of its 3G infrastructure business with AT&T Inc. (NYSE: T) after it failed to deliver the goods on time.
When Lucent announced its WCDMA deal with Cingular in late 2004, it was a breakthough for the U.S. vendor, which had been trying for years to land a large reference customer. (See Cingular Confirms 3G Trio.)
Since Alcatel and Lucent merged, though, the vendor's mobile strategy has become somewhat complex, with AlcaLu determined to migrate its 3G customers onto the WCDMA line it acquired from Nortel Networks Ltd. . (See AlcaLu Makes Product Cuts .)
It has also experienced increasing pressure from other mobile equipment vendors, though CEO Pat Russo had been bullish about the vendor's prospects in the GSM and WCDMA sector during the second half of the year. (See AlcaLu's Russo: We're Under Attack!)
AlcaLu recently issued a profit warning following a slowdown in CDMA spending in North America. (See AlcaLu Cuts 2007 Outlook by $1.25B.)
According to the reports, Ericsson AB (Nasdaq: ERIC) is the beneficiary of AlcaLu's plight.
— Ray Le Maistre, International News Editor, Light Reading