Alcatel-Lucent Shares Down on AT&T Report


Shares in Alcatel-Lucent fell by more than 2% in early trading on Friday after the Financial Times said it could lose some AT&T business to Ericsson.

Ericsson took advantage of Alcatel-Lucent's difficulties in the 3G wireless market to win more business from AT&T, the paper said. The shares, already battered last month by a profit warning, lost 2.36% by 0725 GMT at 7.04 euros.

AT&T awarded a $2 billion contract in 2004 to Ericsson, Lucent and Siemens to supply 3G infrastructure for its U.S wireless network. Under the original terms Ericsson was to get about $900 million, Lucent $700 million and Siemens $400 million.

But Ericsson's share of the contract would exceed 50%, the paper said, citing people familiar with the situation.

"After delays by Alcatel to deliver WCDMA technology equipment, Ericsson stepped in," the paper said.

It also said that AT&T had considered reducing its suppliers to two by dropping Alcatel-Lucent but had decided for now to retain all three, subject to review.

Alcatel-Lucent was quoted as saying: "We continue to be a critical WCDMA supplier to AT&T. Our market share has remained relatively stable and we anticipate that if we can continue to meet our commitments we will maintain our market share."

A company spokeswoman told Reuters she had no further comment to make.

Alcatel-Lucent, created in December by the takeover of U.S.-based Lucent by France's Alcatel, has been dogged by merger-related costs and uncertainty over product integration.

It has issued three profit warnings in less than 10 months, the latest on Sept. 13.