Alcatel-Lucent chief dismisses latest Nokia merger rumours

Alcatel-Lucent CEO, Michel Combes, again scotched rumours suggesting a merger with Nokia's Networks business is on the cards, during calls to discuss the company's first-quarter earnings.

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Michel Combes, CEO of Alcatel-Lucent

Combes said his primary objective is to fulfil his restructuring plan for the network equipment vendor rather than pursue a merger. The CEO also hinted that the time for consolidation in the infrastructure business is past, and that now is the time to allow the company to grow under its own steam, Reuters reported, citing French newspapers.

However, Combes added that consolidation among telecoms operators should be allowed, to ensure those companies have the financial clout to invest in high-speed internet networks.

The CEO's resistance to a merger was aided by Alcatel-Lucent's performance in the first quarter. The company reduced its net loss in the period from €353 million ($485 million) in 2013 to €73 million in the recent quarter--a decline that suggests Combes' Shift Plan is bearing fruit.

Alcatel-Lucent's performance in the quarter reassured Natixis analyst Eric Beaudet that the company will achieve the targets of Combes' restructuring plan, Bloomberg reported. Combes is almost halfway toward achieving his goal of cutting costs by €1 billion by 2015, and a little over a third of the way towards a target of disposing €1 billion worth of assets in the same period, Bloomberg noted.

The vendor's share price was lifted last week by the latest rumours of a potential Nokia takeover, which were prompted by the completion of the sale of Nokia's device business to Microsoft, Reuters reported.

Combes also revealed Alcatel-Lucent was hit by component shortages during the first quarter, which mostly impacted its performance in Chinese LTE deployments, sister publication FierceWireless:Tech reported. Nokia also noted problems in its supply chain in the opening months of 2014, and both companies predicted the situation would normalise over the next two calendar quarters.

For more:
- see Reuters report on the merger rumour
- see this Bloomberg article
- see this separate Reuters article
- see the FierceWireless:Tech report

Related Articles:
Alcatel-Lucent cuts losses by almost 80% in Q1
Analyst: NSN merger with Juniper Networks would make sense
Report: Alcatel-Lucent plans to cut fewer jobs in France
Report: Alcatel-Lucent in talks on sale of enterprise unit

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