Alcatel-Lucent ME sales down 8%

Networking equipment vendor latest to see regional sales dampened by Arab unrest
Ben Verwaayen admitted Q1 had been
Ben Verwaayen admitted Q1 had been


Alcatel-Lucent, a major provider of networking hardware and services to telcos and enterprises, saw its revenues in the Middle East slump on the back of political turmoil in the region.

In the Paris-based vendor's first quarter of its fiscal year 2011, sales derived from the Middle East and North Africa fell 8%, Alcatel-Lucent said.

"Of course, this has been a difficult quarter, given the turmoil in that particular part of the world," Alcatel-Lucent CEO Ben Verwaayen told investment analysts during a conference call on Friday.

"I have to give a great deal of respect for our local team, not only how they have handled the human aspect of it and the customer aspect of it, but if you look to the numbers, it's minus 8%, which is given the circumstance, a pretty good performance."

Like others in the network vendor ecosystem, Alcatel-Lucent has in place large deals with customers in territories impacted by Arab unrest.

In 2008, the company signed an agreement with Libyan ISP LTT to supply the North African nation with its first commercial WiMAX network. A year later, Alcatel-Lucent signed a multimillion dollar contract to provide Libyan government-owned telecoms carrier LPTIC with optical fibre infrastructure.

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Across all geographies, the picture was a significantly better one, with revenues increasing 15.2% year-over-year to 3.74 billion euros ($5.39 billion). Sequentially, sales slipped 23.1%.

During the three-month period ending March 31 2011, Alcatel-Lucent recorded net income of 32 million euros ($46.1 million), compared to a loss of 473 million euros ($681.1 million) in the year ago quarter.

In terms of market segmentation, Alcatel-Lucent's networking division put in a strong performance. Sales here grew 25.4% to 2.42 billion euros ($3.48 billion), which CEO Verwaayen attributed to robust global demand for IP, optics and wireless. "So what you see is a very strong demand in IP. Very strong demand in optical. Wireless is booming," he said.

Alcatel-Lucent's applications business benefited from an 8.4% increase in revenues to 451 million euros ($649.47 million), while services rose 4.8% to 809 million euros ($1.17 billion).


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