Alcatel predicts increase in mobile, Net sales

Weak telco demand offset by ADSL and mobile growth

Alcatel has forecast a slowdown in demand from service providers for networking equipment that will result in a slowdown of its growth this year.

Announcing its annual results, Alcatel said that sales in its main telecoms business will rise by between 20 to 25 per cent this year, slightly down on an earlier forecast of 25 per cent growth. Consolidation and reorganisation in the US telecoms market has resulted in a slow-down of demand for the high-end networking Alcatel supplies, but with half its sales in Europe it is less exposed to this effect than firms like Lucent. Lucent is slashing 16,000 jobs as part of its plan to return to profitability.

Offsetting weakness in the telco equipment sector, Bloomberg reports that Alcatel forecasts a doubling in sales of ADSL equipment and an increase in sales of mobile phones to 25 million units this year, up 25 per cent on last year.

Alcatel reported its fourth-quarter profits of 426 million Euros ($395 million), up 26 per cent on the same quarter last year, on sales of 9.69 billion Euros ($9 billion). Full year profits were 1.324 billion Euros ($1.23 billion) on sales of 31.408 billion Euros ($29.09 billion), up 36 per cent on figures for 1999. ®

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