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Technology Stocks : Alcatel (ALA) and France
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To: Steve Fancy who wrote (2952)1/31/2001 10:04:21 PM
From: zbyslaw owczarczyk  Read Replies (2) of 3891
 
Highlights from Alcatel conference call:

major reasons for more conservative top line growth 20-25% instead 25%+:
# possible small negative impact of $/euro exchange (40% of sales is in $)
# slower sales of handsets 25% (in 2000 was 20 millions up from 11 in 1999)
# flat enterprise business, offset to some extend by” Omini VoIP
# some networks in US will be most likely pushed toward second half of 2001
# possible upside in second half of 2001
# Q1 will see 25% growth Y/Y
# ALA want to be conservative
no signs of slowdown in Europe and Asia ALA so far not involved in Japan.....
# vendor financing 800 millions on books and 850 millions backing via banks
overall 1.6B out of 31.4B
vendors who are financed are very solid
# ALA could increase revenue , but time for easy money is over and do not want risky projects
# US exposure dominated by ILECs and RBOCs
# in 2001 ALA will be top 2 in basic and professional services

what is unchanged :
# very strong growth in optical terrestrial networks , faster then submarine
# ALA has several optical wins in US , will announce as time goes and will take market share
in US
# in 2000 optics were 7.3billion
# optical components 65% growth, limited by capacity, big b/b
# 10-12 millions DSL lines in 2001 up from 6 millions (access)
# in 2000 ALA broke 1 billion in the next generation of DSL
# 50% growth in broadband edge and core
# lots of wins in mobile infrastructure
# big growth in class 4 substitution (soft switch)
# satellites for multimedia
# 2.5/3G investment should meterialize after licence awards in 2000

Newbridge integration very successful :
670 routing -switch platform (50 gig, IP+ATM+MPLS) is shipping aggressively to carriers in US, Europe and the rest. 13 wins and 30 trials
former 170 edge switch very well positioned on edge , as LMDS base station and as gateway
management system fully integrated with ALA products
350 access switch for CLECs DSL, LMDS and multimedia

New products in 2001:
# 770 ptotonic router in very successful beta tests in four carrier in US and six in Europe and Asia
will contribute to sales in second half of 2001 and will be sold with new optical cross-connection
# the same with edge IP router form Newbridge
# soft switch for some time in tests in many carriers
# 450 Gbit/s version of switching-routing platform 670 (IP+ATM+MPLS) will be bright spot in Q3/Q4 2001
# in the mid of 2001 new DWDM metro product
# 40 gig optical network ready for lunch in 2001. fast adoption will depend on cost of
optical components

new products will improve profitability
ALA will save 2 billion by 2002 using new internal supply system
will reduced inventory, which were created by components shortage and current inefficient supply
system
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