Wireless sector spending set to boom: Verwaayen
Alcatel-Lucent could finally achieve sustained profitability by cashing in on a predicted spending boom in the wireless sector, its CEO says.
Ben Verwaayen told Reuters Global Technology Summit his firm is well-positioned to take advantage of a spike in demand for telecoms equipment in the near-term, which will be prompted by investment in new network technologies and services.
The predicted rise is not just “catch-up” spending in the post-recession era, but instead indicates operators are aiming to fundamentally alter their business models to cater to the growing demand for mobile broadband services, Verwaayen said.
As a result, the company hopes it can achieve break-even on cash flow this year, and reach an adjusted operating margin of between 1% and 5%.
But Verwaayen said he would likely shy away from major M&A activity until the company's financial prospects are clearer. Instead, the company will look for smaller buys, such as start-ups.
The firm has had only two profitable quarters since the 2006 merger between Alcatel and Lucent, blaming the complexity of integrating the two companies.