Alcatel-Lucent pondering $500M services hub in India

Alcatel-Lucent (NASDAQ: ALU) may invest up to $500 million over the next three years to build a global services hub in India, according to the company's chief executive.

Alcatel-Lucent CEO Ben Verwaayen told reporters at a news conference that the equipment vendor will decide in the coming "weeks and months" whether to build the center, which would serve the firm's global clients and be used to develop software applications for phones.

Services has emerged as a key growth area for equipment vendors as markets continue to mature. Market leader Ericsson (NASDAQ: ERIC) has decided to focus on this sector. The news about the hub also comes as India has been thrust into the wireless spotlight. The country recently completed its Broadband Wireless Access and 3G spectrum auctions, which raked in a combined $22.67 billion for the Indian government.

Verwaayen has said that the company wants to reach an adjusted operating margin of 1 percent to 5 percent and break-even on cash flow this year. Alcatel-Lucent  reported a first quarter net loss of $660.3 million, wider than the $515.4 million loss it recorded in the year-ago period. The net loss was more than double what analysts expected. The company blamed the results on a component shortage.

For more:
- see this Reuters article
- see this Dow Jones Newswires article (sub. req.)

Related Articles:
India's wireless broadband auction ends; LTE coming to India
Alca-Lu CEO says operator spending will fuel turnaround
Alcatel-Lucent hit by component shortage, slumps to wider loss 
Alcatel-Lucent posts a profit, but cuts 2010 outlook

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