Alcatel seems to be assuming a major role in the Last Mile as they develop xDSL, Fixed Wireless Broadband, perhaps CATV via HFC and cellular phone offerings.
I am particularly interested in the FWB sector which I know Stanford did a lot to develop, which was purchased by NewBridge, and then they were purchased by Alcatel. Today's earnings report says they have now shipped to over 100 customers. Does this make them the Gorilla in the market? Do other players like Netro and Adaptive need to watch out?
Regards,
Mark
excerpt..
Networking
Revenues for the segment increased by 27.5%, with good growth in all businesses. One of the main drivers continued to be the U.S. networking business with a strong performance in wireline access (Litespan) as well as in switching sales. Mobile infrastructure sales were strong in Europe as well as achieving significant gains in Africa and the Middle East. Network services, especially in turnkey networks, continued to turn in an excellent performance.
Alcatel's LMDS offering is rapidly gaining recognition with 100 customer deployments/trials currently underway. The inclusion of Newbridge's ATM platform has optimized Alcatel's strong position to provide end-to-end solutions to its customers in this rapidly expanding market. A good performance was registered with evolving carrier networks with all of Alcatel's European switching sales based on a broadband matrix offering.
The segment's income from operations increased over second quarter 99, due to an improved performance in the mobile infrastructure business as well as good growth in network services.
Internet and Optics
Record sales growth was again registered with an increase of 47.1% over last year, (Newbridge was consolidated for one month during the quarter). Significant rollouts continue in the ADSL business, with ``over the 1 million mark'' achieved during the second quarter, bringing total line deliveries at half year to 1.8 million. While up to now most of the deployment has been in the U.S., ``unbundling'' of the local loop is now spreading in Europe. As the worldwide leader in ADSL, Alcatel is seeing the benefits of this growing market, and in the second quarter, 15% of its total ADSL business was in Europe.
In the optics business, submarine transmission continues to be a key driver for the segment, with significant demand in the Asia Pacific fueling growth. In terrestrial transmission, wins were recorded in the U.S. with two CLEC's and at the same time Alcatel's position in Europe was strengthened. Also in the U.S., the second quarter was marked by a considerable shift in product mix, with Alcatel's Optinex(TM) offering for new generation optical products, which is beginning a significant rollout with major U.S. operators, replacing legacy Sonet products. Given the current backlog of orders, Alcatel believes that its new Optinex(TM) product offering will account for approximately 25% of its total optical business in the U.S. for the full year 2000.
Alcatel also achieved a technological breakthrough in DWDM with the world's first terrestrial 40-gigabit system successfully completing field trials. Finally, the optronics business grew substantially as a result of the current strong demand in components.
Sales in the space activity continued to be soft during the second quarter, reducing the segment's overall revenues, which increased by 74%, excluding this business. However, the second quarter was highlighted by a strong turnaround in order intake, among which was Alcatel's recent contract win to furnish new generation commercial satellites to a leading U.S. provider of satellite communications solutions, and which signaled the beginning of a turnaround in this market.
Income from operations increased significantly over the second quarter 99 due to a substantial contribution from the carrier data business with increased profitability in ADSL and continuing strong results in the submarine network activity.
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