Alcatel buying DSC is a direct threat to LU market share in its own country. The merger agreement says this combination is about growth, not just cust cutting The general overlap in equipment which DSC brings to Alcatel, I believe, is redundant. Alcatel wants into America and NOW in a big way. If I were LU I would take note.
This now gives Alcatel a CO/DLC solution based on CAP. The only RBOC that hasn't selected Alcatel is USWest, but they are looking for a DLC solution. USWest could select an Alcatel/DSC/Westell solution based on CAP.
The only thing that does not jive with me is if Alcatel was interested in USWEST, why wait until after the Bell announcement to announce the buying of DSC? Basically, what if your theory is correct then Alcatel is buying into BELL and USWEST for the cost of DSC which is 4.4 billion in stock. I am not sure this makes sense to me or not. If Alcatel REALLY wanted "an in" to those regions it is much cheaper to buy out Westell for $20/sh=700M instead of 4.4B. (This is more than just DSLAMS and modems)
Did Alcatel bid on the Bell contract? I have a feeling they did and Bell didn't select them. I think if Alcatel had won this contract they would not have needed DSC. Why else would Alcatel time the release after the Bell announcement. Makes no sense to me.
2) Bell has selected specific equipment for initial deployment. That is what they want. . Yes, the second phase is wide open to other equipment, but, if I were Bell I would draw the line when trying to mix and match various types of different equipment. It introduces a much more complex support structure once you do this. I am confident that what they have chosen to date will be used as their baseline foundation for follow on deployments.
In other words, DSLAMS are there to stay and not change. Now the future Westell DMT modems are not a not a shoe-in anymore. Now you know why Alcatel has pushed the concept of compatibility so hard. If I know Alcatel, they will turn around and give their modems away for free.
One this is for sure with me. Westell and this contract selling at $11 is buyout bait. |
