Alcatel-Lucent

Rich Tehrani : Communications and Technology Blog - Tehrani.com
Rich Tehrani
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Alcatel-Lucent

alcatel-lucentI like the new Alcatel-Lucent logo. It makes me think of a cross between an airline and an ecommerce company. I do really like the way the A and L come together as one. On a separate note the new company's credit rating was reduced to junk by Fitch ratings.
 
According to Fitch, The ratings reflect integration risks of the merger, as well as likely challenges in achieving the company's targeted $1.7 billion of annual cost reductions within three years.
 
Demand in the industry is also likely to remain volatile, driven by carrier consolidation as well as more concentrated and uneven carrier capital spending, Fitch said.
 
Obviously these are all valid points but one area not discussed in this article about the company's debt rating is the insatiable demand worldwide for many of the technologies the new Alcatel-Lucent sells. For example, wireless, IMS and IPTV to name a few.
 
Still carrier consolidation has a way of reducing margins. Fitch thinks this new rating should remain relatively stable meaning no change for a few years or so.
 
Although I haven't heard anything negative about the merger from insiders I can imagine it is a great challenge to integrate these companies as they have vastly different corporate cultures. It doesn’t mean it can't be done it just means it is going to be tough. Still the brand equity in this new company is so great it is worth noting the new Alcatel-Lucent may get away with a stumble or two until it gets the integration complete.


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