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AlcaLu/Huawei Rumor Update

9:15 AM -- Is it true there's no smoke without fire?

Having already dismissed recent suggestions that it was planning an investment in, or takeover of, Alcatel-Lucent (NYSE: ALU), Huawei Technologies Co. Ltd. has now felt obliged to dismiss further speculation about a possible relationship with the Franco/American giant. (See Rumor Mill Boosts AlcaLu.)

Reports emerged late Wednesday -- initially on French Website Challenges and then, in English, in this Reuters report -- that the two vendors were discussing some sort of technology collaboration or joint product development.

Those reports were swiftly followed by a denial from Huawei. See this separate report from Reuters.

Telecom vendor partnerships are quite commonplace -- witness the formation of Carrier Ethernet Solutions BV by Juniper Networks Inc. (NYSE: JNPR) and Nokia Networks as a very recent example -- but the potential complications and fallout from an AlcaLu/Huawei alliance make such a relationship extremely unlikely, in my view, and would likely only benefit one company. And it's not French.

— Ray Le Maistre, International News Editor, Light Reading

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