Alcatel, Lucent complete merger, eye telecom growth in 2007

Alcatel-Lucent is all optimism for 2007 as it expects another year of growth for the country’s fixed broadband DSL market and as 3G develops better market traction.

Barely a month old since the merger was completed on Dec. 1, Alcatel-Lucent is confident that the two firms’ combined technologies and expertise will give the new company stronger solutions for telecommunication operators next year.

The new company is now restructuring its management and human resource teams in the country as well as its network of suppliers.

The combined local offices of the former Alcatel and Lucent Technologies currently have 140 people under a new president and country senior officer, Klaas Oreel. He replaces Herve Pourcines who will report back to the company’s executive offices in Paris after his stint as president of Alcatel Philippines.

Oreel says the integration of the two companies here and abroad has been smooth due to the absence of redundancies in terms of geographical coverage and product offerings.

"It has been a good fit with at least only 10 percent redundancies worldwide. Put together our strategies and solutions didn’t overlap much in the Philippines where Lucent did well in providing managed services and maintenance which we will continue to build up and grow as a business," Oreel adds.

Alcatel-Lucent boasts of one of the largest global R&D capabilities in communications and a broad portfolio for wireless, wireline, services, convergence, and enterprise requirements.

With presence in 130 countries, the new company has strengths in Internet Protocol television (IPTV), broadband access, carrier IP, IMS and next-generation networks, and 3G (UMTS and CDMA). The merger brings a total of 79,000 employees with 18,000 experienced in global industry services.

Pourcines views the merger as something necessary in order for suppliers to continue being competitive in the face of continuous consolidation of telcos.

The industry consolidation that started in the 1980s considerably reduced the number of telecom players but not the number of suppliers competing for the telcos’ business.

"The pie has shrunk but there remained the same number of suppliers eating from the same pie. There’s a trend (among suppliers) to converge, too, to become stronger," he adds.

With the merger behind, Alcatel-Lucent is now ready to address the market’s requirements next year. Both Pourcines and Oreel see the telcos’ requirements only going up as voice and data traffic in the country increases mainly due to lower service fees or costs.

"Two things are happening here: the cost of voice and data communication is getting cheaper, resulting in higher traffic, therefore telcos need bigger pipes," says Pourcines.

"Also, in preparation for potential 3G pickup, operators are upgrading their transmission networks for their wireless and at the same time spending more on fixed DSL," he adds.

Being relatively new, 3G didn’t exactly take off this year as expected. Pourcines says 3G handsets and services remained quite expensive to get wide market acceptance.

However, he is optimistic that market usage of other technologies like Voice over Internet Protocol (VoIP) would continue to snowball in 2007.

"If there are about one million Filipinos who leave the country every year and more or less a million new PCs are bought (by their families), that scenario creates a good market for VoIP which offers cheaper voice calls," says Pourcine.

Meanwhile, while waiting for the 3G market to mature, Alcatel-Lucent already has a roadmap for 4G ready.

"We are taking the best from all technologies to shape the future of wireless and, so far, we see ourselves as the only player positioned to craft 4G," says Pourcine.