Lucent's O'Shea Comments on Telecom Equipment Outlook: Comment
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Lucent's O'Shea Comments on Telecom Equipment Outlook: Comment
By Molly Schuetz
Paris, Feb. 15 (Bloomberg) -- The following are comments from Bill O'Shea, executive vice president of corporate strategy and marketing for Lucent Technologies Inc. and president of Bell Labs. He spoke in an interview in Paris.
On acquisition strategy:
``Our major focus is refocusing the company, getting the customer focus in line. We have products that are well-designed and in execution mode. We're just concentrating on our customers and technology now.''
On consolidation in the industry:
``Everyone is convinced there will be some consolidation in the industry, but it will likely be more among the first two-tiers of the industry, not at the top. I don't see any near-term combination of the six majors.''
On deploying Universal Mobile Telecommunications System networks:
``Trials are already starting and we're involved in commercial trials. We're just wondering when the build out will be. We have very strong competitors here (in Europe). Ericsson and Nokia are the frontrunners, but no one has rolled out networks yet.''
On Lucent's European strategy:
``Europe is very important to us. It's a large market and we're building up our capability. We have good relationships with our major customers. It's a substantial business for us. Our prime focus is on the largest service providers and many of them are here in Europe.''
On growth outlook:
``We've said we would have 10 percent to 15 percent quarter on quarter growth. We haven't changed that. We have close discussions with our customers. One reason there is a lack of visibility is that our customers themselves have trouble getting their own visibility.''
On winning market share from Nortel Networks Inc.:
``If we're increasing our business 10 to 15 percent a quarter and they are forecasting a drop, then yes, we're increasing our market share. We went from being behind them in optics to coming out ahead. We continue to hold our position in the packet world and may be gaining in mobility.''
On goal to break even on quarterly sales of $4.25 billion:
``We still believe we can reach that target, even given the current conditions, in terms of operating income this year and in terms of operating cash flow a quarter later.''
On the sale of the enterprise services business:
``We have a number of people bidding on it now. The set of proposals is on the table and it's being negotiated.''
On when it will sell manufacturing plants and equipment to Solectron:
``We haven't made a prediction for when it might close.''
On whether he will stay at Lucent through the end of 2002-2003:
``Well, I'm still here, aren't I? We're in the midst of a challenging act to put the company right.''
On network capacity:
``Clearly there is overcapacity still in the backbone, but some legs of the network need more capacity. In the metro area there is undercapacity. Our enterprise customers want more bandwidth and will be building out sooner. When the economic recovery comes, it will grow customer revenue through an increase in traffic on the networks and they'll turn to us to provide more capacity. This is still a $200 billion market.''
On UMTS technology:
``It will certainly work. We've seen the technology demonstrated already. The real question is what's the impetus for getting it started? What are the services that are new and unique that will drive demand? Our view is that it's not going to start with consumers. On the other hand, enterprises want to be able to wirelessly access data. There's not enough mobile speed available today. 3G provides the possibility a field worker, with access to a high-speed interface, can get access'' to his company's data base.
``The applications are there. You don't need to invent new ones. As the networks get in place for that, then you have a test bed to launch the general services. This is a natural place to start. If you can make the economic case to the service provider, then the network is in place and you can attract third party service providers. Companies are interested. It remains to be seen how quickly they will take it up. The approach could get the U.S. in faster than if you go the consumer route. Ultimately it will be a consumer market. Eventually there will be consumer applications, it's just a question of time. But first there will be demand for high-speed data for enterprise.'' |
