Alcatel-Lucent CEO: 'We are back and here to stay'

Alcatel-Lucent's (NYSE: ALU) CEO said the company remains on track to reach its goal of becoming free cash flow positive by next year. And he said the company will be able to persist against its larger rivals like Ericsson and Huawei.

"We are back and here to stay," CEO Michel Combes said during an interview with CNBC. "I expect to win."

Combes said the company continues to make progress on its Shift turnaround plan, which includes cost-cutting measures as well as job cuts and the sale of non-core assets.

"We are at around 60 percent in one year of the plan with another one and a half years to go," Combes told the Financial Times. "That gives me full control to deliver."

Indeed, Alcatel-Lucent just last week announced it will pursue an initial public offering for its submarine cable business in the first half of next year, ending a string of rumors about the future of the division that's been suffering from weakening demand. Combes said the IPO would help fund other portions of the company's business.

Combes declined to tell CNBC what other assets Alcatel-Lucent might shed in the future, but he said the company plans to remain relevant in wireless via a renewed focus on innovation--both through internal and external means. "It's all about innovation, because you can only win in this market by innovation," he said.

Alcatel-Lucent capped the second quarter with a narrower loss--but falling sales in the United States sparked concern among investors that the company's reliance on large contracts from U.S. carriers could hurt it if network activity drops.

Most recently, AT&T's (NYSE: T) announced Alcatel-Lucent as one of the latest vendors to join the operator's User-Defined Network Cloud initiative. Being included in the program represents a milestone for Alca-Lu since AT&T's program is geared toward completely changing how the operator conducts business, works with suppliers and manages systems, platforms and software. Essentially AT&T is moving away from using specialized, proprietary hardware that was tightly coupled with vendor software and is instead focused on using virtualized software on less-expensive commodity hardware.

Also, in July, Vodafone made Alcatel-Lucent its supplier of reference for LTE metro cells that come integrated with Wi-Fi. ABI Research recently estimated that Alcatel-Lucent placed first in small cell equipment market share during 2013, ranking above Airvana, Cisco and ip.access.

For more:
- see this CNBC video
- see this Financial Times article

Related Articles:
Alcatel-Lucent to take submarine cable business public, sees Q2 revenues rise to $4.4B
Alcatel-Lucent narrows loss, but U.S. sales drop
AT&T adds Alcatel-Lucent, Fujitsu to list of vendors backing its SDN, NFV efforts
Alcatel-Lucent's outsourcing of 2G, 3G R&D unlikely to rock the boat

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