Alcatel, which plans to merge with Lucent Technologies to create the world's largest telecom vendor, gave some more color on its falling margins in the first quarter. Mobile pricing pressure hurt Alcatel, dampening otherwise solid results. The equipment vendor reported a net income of €104 million and revenue up 18 percent from a year earlier to more than €3 billion. However, the company's gross margin was 34.9 percent, down from 36.4 percent last year. Interestingly enough, competition from Chinese vendors Huawei and ZTE are not leading the charge on the price war even though they are often feared as price slashers, said Serge Tchuruk, Alcatel's CEO.
"The Chinese [vendors] are still around, but the Chinese are not necessarily always the most active in depressing prices," Tchuruk said. "Today, one of the largest players on the scene losing market share is the most active in depressing prices." Earlier this week, Lucent posted a 32 percent decline in second-quarter earnings, blaming weakened North American wireless sales and a delay in China's 3G network build out.
To read more about Alcatel's results:
- check out this article from Telephony