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Alcatel-Lucent CEO eyes Asia Pacific growth

Alcatel-Lucent SA expects sales from the Asia-Pacific region to become a larger portion of its global revenue and foresees returning to "normal" profitability by 2011 after breaking even this year, its chief executive said.

 "We've said that every quarter will be a little better than the previous one," Alcatel CEO Ben Verwaayen said in an interview with The Wall Street Journal. He spoke after the French-American telecommunications-equipment maker announced an unexpected profit in the second quarter of EUR14 million ($19.7 million) on revenue of EUR3.9 billion."Asia has played a very important role in that."

Verwaayen has engineered an initiative to cut costs by EUR750 million, after Alcatel recorded losses in recent years. He said he aims for Alcatel to break even this year and make a small profit next year as well, then return to stronger "normal" profitability in 2011.

Asia generated 19% of Alcatel's revenue in 2008. Verwaayen declined to estimate how much that share will grow. But with other global markets declining, continued expansion in China, India and Australia will increase the region's contribution to total revenue, he said.

"Asian consumers are extraordinarily young compared to the rest of the world, and extraordinarily curious in using new technologies," he said."Therefore you can see a lot of operators looking to serve that market, which is good for us."

One bright spot in the industry has been China, where operators are rolling out third-generation wireless networks that enable high-speed data services like wireless video. Chinese carriers are expected to spend tens of billions of dollars on equipment for those networks over the next three years. Analysts say Chinese vendors Huawei Technologies Co. and ZTE Corp. are leapfrogging foreign rivals to win a much larger share of 3G sales than they had for China's existing networks.

Verwaayen said Alcatel is "well positioned in China," because it sells equipment using each of the three 3G technology standards China's three carriers are using. But he acknowledged the growing competition from Chinese rivals."In our particular industry it is absolutely true there are new kids on the block who are no longer new kids. They are very established players," Verwaayen said."We'll have to cope with it."

Alcatel, which has been operating in China for 25 years and has more than 10,000 employees here, has reported winning $1.7 billion in contracts with China Mobile Ltd. and China Telecom Corp. Verwaayen said Alcatel's total contracts are "well above" that amount, but didn't elaborate.

Источник: Total Telecom

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