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Tim Luke, Jiong Shao and Jeff Kvall looked at the impact of the Lucent Technologies Inc. (NYSE: LU) -Alcatel (NYSE: ALA) merger on the wireless industry in a note to clients. Excerpts include:

The merger will create the second largest global wireless equipment vendor, with approximately 20% market share. The combined company should surpass Nokia, currently the second largest systems vendor, and trail only Ericsson, which leads with approximately 35% market share...

The product overlap between Alcatel and Lucent is modest... The lack of overlap suggests the merged company will gain minimal economies of scale in their wireless units initially...

Crisp merged execution may allow the new company to better integrate their supply chains over 2-3 years. This is particularly true in W-CDMA. Alcatel's GSM customer base should migrate to W-CDMA over time, perhaps beginning with the 3G licenses in China due this year. Lucent's signature W-CDMA customer is of course Cingular. The company may also be able find some synergies between its CDMA2000 and W-CDMA base station platforms. Ericsson, for example, indicated that it was able to find such synergies between its two platforms, although of course Ericsson ultimately left the CDMA2000 business.

Source: Lucent And Alcatel Create The Second Largest Wireless Vendor (ALA, LU, NOK, ERICY)