NTERVIEW-Alcatel says needs no more acquisitions
By Marcel Michelson
GENEVA, Oct 11 (Reuters) - The time of big acquisitions is over for French telecommunications equipment group Alcatel and the company is now focusing on improving its profitability on the back of expected double-digit sales rises, its chairman said on Monday.
Some small add-on purchases are possible but no multi-billion deals are planned.
''We have come a very long way in streamlining and focusing Alcatel on the core business, and the core business today is 90 percent of the sales. This is through, we are finished with it,'' Serge Tchuruk said in an interview.
He said the next objective was to refocus on the high growth segment of telecommunications.
''We have made very important strategy choices and today we precisely know where we want to go,'' Tchuruk said.
He said the aim was become one of the key world-wide players, ''top three or four. We are already there in size terms, we also want to be there by scope.''
Tchuruk said Alcatel had recently spent $7 billion buying technologies and companies in the United States and had bid for Genesys. Even so the company's acquisitions were small compared to other deals in the sector of dozens of billions of dollars.
''Today, I think that in a short period of time we have accumulated the portfolio and the strengths that we need to be a key player in the Internet world,'' Tchuruk said.
He dismissed rumours that Alcatel was interested in buying CIENA Corp.
''We are competing with Ciena and others. Alcatel has developed inhouse technology which is such that we do not need to make any acquisition in the WDM (wavelength division multiplexing) field,'' he said.
FOCUS ON PROFITABILITY
Alcatel's main focus now was to improve its profitability by maintaining high turnover growth, improving productivity, reducing the cost base and ensuring technological superiority.
He said the company had achieved 15 percent growth in 1997, 15 percent last year and was on track for double-digit growth this year. ''I think this objective has been met,'' Tchuruk said.
He said a major restructuring launched this year would have its effects this year and next.
He said Alcatel had achieved breakthroughs in several key areas such as broadband access with ADSL and WDSL. ''We are the world leader in what's going to be the hottest area in telecommunications,'' he said.
ASSET SALES POSSIBLE
Tchuruk said Alcatel was in a round of ''hot'' discussions, mainly with the French government, to finalise the sale of assets in nuclear engineering group Framatome, where it has a 44 percent stake, in return for a bigger stake in electronics group Thomson, where Alcatel already has 16 percent.
''I hope it can be achieved pretty soon and that will be an important step,'' he said.
Alcatel has put its home telephone products, including the screenphone, in a 50/50 joint venture with Thomson Multimedia. This does not include the mobile handsets.
''We are evaluating some more options but by and large we have very clearly achieved our moves now,'' he said. |
