UPDATE 1-Telecoms gear makers give no forecasts for 2009

BARCELONA Nov 20 (Reuters) - Telecoms equipment vendors Ericsson (ERICb.ST) and Alcatel-Lucent (ALUA.PA) declined to give 2009 forecasts on Thursday and emphasised cost-cutting and cash generation amid uncertainty over customers' spending plans.

Ericsson, the world's biggest mobile telecoms gear maker, said it was planning for a flat 2009 market but said this was not a forecast.

Its finance chief declined to comment on fourth-quarter business, saying the situation was too fluid.

"We met all our major customers in the last few weeks just to see where they are. That doesn't mean it couldn't change in two weeks again," Hans Vestberg told Morgan Stanley's annual Technology, Media and Telecoms conference in Barcelona.

Alcatel-Lucent, still struggling with the fallout from a 2006 merger and in the throes of a strategy review under a new CEO, reiterated 2008 sales are expected to fall 2-5 percent, implying a 20 percent rise this quarter compared with the third quarter.

The Franco-American company's investor relations chief, Remi Thomas, said this was achievable due to the seasonality of Alcatel-Lucent's business.

Telecoms operators, many already laden with debt, are now under more pressure from cash-strapped consumers to cut costs. Many have told this week's conference they could quickly cut capital spending if necessary to protect margins.

Alcatel-Lucent's Thomas said he believed carriers would continue to invest in strategic areas designed to generate new business, in capital equipment that could reduce operating expenses, and to meet regulatory requirements.

"Other than that, obviously, there are areas where operators will think twice before they invest, and we think they'll be very careful," he said.

Ericsson's Vestberg was more reluctant to make predictions about customer spending, saying only that the company -- whose own management appeared surprised by the first of a series of warnings last year -- had learned to stay close to its clients.

He added: "You saw that in the last 12 months; we have a very strong focus on cash generation."

Asked whether Ericsson remained committed to its loss-making cellphone venture with Japan's Sony (6758.T), Sony Ericsson, Vestberg replied that management supported the Sony Ericsson team in the tough decisions it had to make in the current market.

After years of double-digit percentage growth, global handset sales are set to fall next year, most in the industry believe.

Vestberg added that Ericsson was focused on protecting its market share in China, currently about 32 percent but falling as Chinese vendors grow.

COST CUTS

Both companies said they would continue to focus on cost cuts as one of the few areas under their control.

Vestberg said Ericsson was ahead of plan on a 4 billion Swedish-crown ($488 million) cost-cutting target for this year. "We will exceed the programme that we started at the beginning of the year," he said.

Alcatel-Lucent, whose customers have been disgruntled by uncertainty as to which standards the company would support post-merger, said it would have to raise R&D spending on next-generation technology such as LTE (long term evolution).

"We believe it's critical for us ... that we're in a position to accompany customers in that move," Thomas said. But he added that cuts would have to be made elsewhere. "The idea is not to increase R&D in absolute euro terms next year," he said.

Both companies said they would not offer significant vendor financing to customers to stimulate demand, as software maker SAP (SAPG.DE) said it had begun to do indirectly.

Alcatel-Lucent narrowed its full-year guidance range, saying it expected a gross margin of 34-36 percent and an adjusted operating margin of 2-5 percent.

Previously, it had forecast gross margin in the mid-thirties and low to mid-single digit operating margin.

Thomas also said the company would receive 1.6 billion euros ($2 billion) tax free if the sale of its 20.8 percent stake in French defence group Thales (TCFP.PA) to planemaker Dassault Aviation (AVMD.PA) went through successfully.

The agreed sale is awaiting regulatory approval.

Alcatel-Lucent also has 1.4 billion euros immediately available in the form of a credit line, he added.

Asked whether the company might consider buying back convertible bonds due in January 2011, Thomas said it would consider doing so once it had the cash from the Thales sale and a clearer picture of what 2009 held in store. (Reporting by Georgina Prodhan, editing by Will Waterman)