Alcatel-Lucent to shed fixed-line product R & D unit

Alcatel-Lucent is in the process of selling its global fixed-line product R & D department and expects to reach an agreement by the end of the third quarter, a source close to the company’s Chinese subsidiary revealed to Telecom Asia.

"The headquarters are in discussions with several potential buyers. It is a global decision and the entire R & D of fixed-line products of Alcatel-Lucent will be sold," the source said.

The source claims that the decision comes from the global decline in revenue from fixed line products.

The unit includes the R & D for program-controlled switches the S12 and the E10, as well as the Media Gateway Controller-10 (MGC-10), an NGN product manufactured in Germany.

It is understood that approximately 200 people in Shanghai will be affected by the sale, however the company's Chengdu R & D center is believed to remain intact as it focuses on GSM products. Earlier this month, Alcatel-Lucent announced it has sealed a 10-year global alliance with HP to deliver converged IT and telecom solutions to enterprises. It is reportedly considering transferring up to 1,000 jobs to HP as part of the deal.

Alcatel-Lucent recorded a net loss of EURO 380  million on revenues of  EURO 3.4 billion in the first quarter of this year. The company has lost about EURO 8.1 billion over the last nine quarters, and does not expect to make a full-year profit until 2011.  The vendor has already flagged that it is cutting R&D spending on older technologies, as well as manufacturing, supply chain and procurement costs.