Alcatel-Lucent targets submarine network unit IPO for 2015
As part of its announcement of second quarter 2014 financial results, Alcatel-Lucent (Euronext Paris and NYSE: ALU) revealed that it plans to spin out its submarine network equipment and services business into a separate publicly traded company. Management at the optical transport systems and router vendor hope to launch an IPO for the Alcatel-Lucent Submarine Networks unit in the first half of next year.
The plan puts to rest speculation among analysts over what Alcatel-Lucent would do with the undersea network business as part of CEO Michel Combes’s restructuring effort, called "The Shift Plan" (see "Alcatel-Lucent shifts and optical transport, FTTx shift with it" and "CEO Combes makes case for Alcatel-Lucent's shift").
Alcatel-Lucent intends to retain a majority stake in the new entity. The submarine network systems company will use its public capitalization to fund its current telecom-related operations as well as expansion into services and equipment for the oil and gas industry.
Alcatel-Lucent reported revenues of 3.279 billion euros for the quarter, an improvement of 0.7% year-on-year when comparing like business activities. Gross margin was 32.6%. However, the company’s Core Networking revenues declined 10% versus the year-ago quarter. IP Transport revenues dropped 6.2% year-on-year, although Access Network revenues climbed 9.5% versus 2Q13.
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Stephen Hardy | Editorial Director and Associate Publisher
Stephen Hardy has covered fiber optics for more than 15 years, and communications and technology for more than 30 years. He is responsible for establishing and executing Lightwave's editorial strategy across its digital magazine, website, newsletters, research and other information products. He has won multiple awards for his writing.
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