ALU CEO hints at business unit sales, more co-sourcing deals

Alcatel-Lucent (NYSE:ALU) CEO Ben Verwaayen isn’t done tinkering with his company yet. After selling off its stake in defence contractor Thales and entering into a major alliance with HP (NYSE:HPQ) to sell integrated communications and IT solutions, Verwaayan said there are plenty more plans in the works for more co-sourcing deals, the possibility of outsourcing some of its own product development and even the sale of some of its product divisions.

“If it’s not core for us, it must be core for someone else, and probably there is a setting in which it is better,” Verwaayan said during Alcatel-Lucent’s 2nd quarter earnings call. “We’ve made some good progress here not just to identify those areas where we can either have disposals or co-sourcing, but we’ve also made some good progress in discussions with partners.”

Alcatel-Lucent posted its first profit since Alcatel and Lucent Technologies merged, in part due to the cash injection it made off of selling Thales. The quarter was marked by several key wins, including contracts to supply a mobile backhaul network for NTT DoCoMo, $1.7 billion in network frame agreements with China Mobile and China Telecom and a wireline managed network deal with Bharti Airtel in India. The contract Verwaayan focused on most, however, was the one that got away: Sprint’s managed network contract which went to arch competitor Ericsson. “I hate to lose,” Verwaayan said.

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