Alcatel Lucent sells subsidiary to China Huaxin

Alcatel Lucent sells subsidiary to China Huaxin

Alcatel Lucent SA, the global telecom equipment maker, has sold its enterprise business unit to China Huaxin Post & Telecommunication Economy Development Center, a Chinese state-owned technology investment company, for 202 million euros (8.27 billion baht).

The newly formed holding company is Alcatel-Lucent Enterprise, in which China Huaxin holds an 85% share and Alcatel Lucent 15%. The new business entity became effective yesterday.

The move is part of Alcatel Lucent's shifting strategy, targeting 1 billion euros in fixed cost savings and asset sales of over 1 billion euros from 2013-2015.

"The new acquisition will enable Alcatel-Lucent Enterprise to become profitable and debt-free, with strong financial cash flow expansion," said Matthieu Destot, vice-president for sales in Asia-Pacific. 

The company wants to double its revenue in five years from 700 million euros to 1.5 billion. To achieve the target, Alcatel-Lucent Enterprise will invest 300 million euros for an initial global expansion phase.

"We aim to become a top three player and achieve a share of at least 15% in the communications and networking technologies markets of selected countries, while in vertical industries we want 8-9%, which would be fifth globally," said Mr Destot.

It will focus on specific areas: IP communication, mobile multimedia communication, unified access networks, automated data centres through software-defined networks, and shifting business models to cloud-based service.

The enterprise business will take a partner-centric approach rather than a product-centric one to drive sales through demand generation, marketing and sales tools. It spends 16% of revenue on research and development and 23% on marketing and sales.

The vertical industry focus will be in certain industries with strong growth, such as the hospitality segment in Thailand and Indonesia and manufacturing in Taiwan and South Korea.

In Thailand, it will establish new company by year-end, using the operation as a springboard for expansion into Myanmar.

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