Change is afoot at Alcatel-Lucent. The company has announced a three-year ?shift plan?, aimed at repositioning itsel as a provider of IP networking and ultra-broadband access services.
According to the company, the key components of the ?shift plan? include:
- Refocusing the group?s expenditure on research and development (R&D) towards IP networking and ultra-broadband access.
- Reducing the group?s fixed cost structure by Euro 1 billion, by focusing on reducing sales, general and administrative (SG&A) expenses and improving operational efficiencies
- Selling selective assets, with the aim of generating close to Euro 1 billion over the period outlined in the plan.
- Re-profiling the group?s debt of Euro 2 billion.
- Enhancing revenues from the core networking business by over 15 per cent, from Euro 6.1 billion in 2012 to over Euro 7 billion in 2015.
- This will include increasing operating margins in this segment from 2.4 per cent in 2012 to over 12.5 per cent in 2015.
- Focusing on cash management in the wireless, fixed access and other businesses. This will include investments in 4G long term evolution (LTE) and vectoring and fiber-based access systems.
- At the same time, the company will significantly reduce R&D spending on legacy technologies. This is expected to deliver positive segment operating cash flow of over Euro 250 million in 2015.
- Also, Alcatel-Lucent?s management structure will be reorganised into four main business lines: IP Routing and Transport, IP Platforms, Wireless and Fixed Networks.
