How Alcatel Is Reinventing Itself

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France-based company Alcatel Lucent SA (NYSE: ALU), proposes solutions that are used by businesses, providers and governments across the world and offers data, video and voice services to customers of its own. Apart from this, Alcatel is also involved in fixed line, mobile and Internet Protocol services and applications. The company also operates in the optics technology field. It has three business segments: Services and Solutions, Software and Enterprise. The company has decades old tie-up's with carriers like Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T). Alcatel is hoping that these will come in handy in fending off rival European companies who are on the look-out to grab a share of the U.S market.

Boosting Capital Base

Robert Vrij, the global head of sales and marketing, said that the Paris-based networking provider has been on a downtrend for a long time now, but this has not stopped its American partners from continuing their relationships with them. Alcatel Lucent signed a multi-million euro deal in December and this has helped in bolstering its American ties. He went on to state that the companies rely on each other to a great extent and that Alcatel is considered to be an important player in the market. All their U.S partners lauded the company when they got the capital boost and it has provided them with a certain amount of comfort.

In a grim economic scenario that has been laced by heavy competition, European carriers have been pulling in the reins on spending and a large number of equipment vendors have been looking outside the country for newer pastures and growth. Close to 40 percent of Alcatel Lucent's 2012 sales came from the U.S while only 26 percent of the company's revenue came from Europe. Every company in the U.S is looking at upgrading to speedier networks and long-standing relationships in the wireless market are becoming valuable and necessary.

Steady Partners

Verizon Communications Inc.'s Vice President, Nicola Palmer, said that beyond just being suppliers, Alcatel Lucent are real partners and that the kind of success that they have experienced with LTE is possible only when you work in perfect synchronization with your suppliers. She continued to say that the company had great success and that Verizon will continue working very closely with Alcatel. Verizon Communications Inc. has had Alcatel Lucent SA as their supplier right through their 2nd, 3rd and 4th generation technology rollouts. The company has partnered with them in their long-term evolution (LTE) networks. These faster speed data networks are the demand of the times and will only need to get more advanced as the years roll by.

Decades later and still going strong

The U.S market is ever-hungry for new products and mobile phones are gaining ascendancy over computers. Speedier wireless networks are becoming a necessity and in a scenario such as this one, Alcatel Lucent expects its performance in the U.S to stay strong and steady. Its last year's U.S sales had increased by $2.1 billion, or 14 percent, in the fourth quarter. The Stockholm-based company Ericsson (NASDAQ: ERIC) reported that its last quarter sales in North America had risen to 17 billion and companies such as Nokia Oyj (NYSE:NOK) and Siemens AG (NYSE: SI) are also trying to nudge into the U.S wireless market but Vrij says that networks such as the ones that Alcatel Lucent SA has been building for its U.S customers for several decades is not something that can be achieved overnight and that their standing in the U.S market is strong.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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