Feature

Outpaced Lucent gives up fibre optics struggle

US telecoms vendor Lucent Technologies is looking to revive its flagging fortunes by selling its optical fibre operations.

It is estimated that a sale could raise between $8bn (£5.3bn) and $10bn, which would help to underpin Lucent’s finances as it attempts to revive its business.

Rival fibre makers, including Corning and Alcatel, are understood to have already expressed interest in the Lucent unit.

The company claimed the move was prompted by its “continuing strategy to sharpen its focus on the systems, software and services that will deliver the next-generation communications infrastructure”.

It has become evident that rivals such as Nortel and Cisco, which have committed billions of dollars acquiring innovative start-ups, have managed to outpace Lucent in the race for dominance in the optical market.

It was the vendor’s inability to keep up with its rivals’ purchasing of next-generation network technology from start-ups that prompted the replacement of Rich McGinn as CEO after three years in the role in October.

McGinn was replaced by former chairman Henry Schacht, whose first action on joining the company was to slash Lucent’s sales and profit outlook for the first quarter of 2001.

Bill O’Shea, executive vice president of corporate strategy and business development, outlined what lay ahead for the company. “Over the next few months, we will determine which approach will provide the most benefit for our customers, our shareholders and our employees.

“We are taking this bold move so we can better focus our resources and investments on the areas critical to our markets, while making it easier for the fibre team to expand its customer base and make the capital investments necessary to meet the increasing global demand for fibre and fibre cable.”


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This was first published in March 2001

 

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