France Telecom interested in Alcatel subsea cables unit-CEO

PARIS Jan 14 (Reuters) - France Telecom would consider taking over the subsea cables business of Alcatel-Lucent, Chief Executive Stephane Richard told reporters on Monday.

The group has expressed its interest in principle in Alcatel Submarine Networks (ASN), though "for the moment it hasn't gone any further", Richard said.

France Telecom has been looking for months at how ASN and its FT Marine unit could work better together, the CEO said.

Alcatel, the loss-making Franco-American telecom equipment maker, is racing to cut costs and reduce cash burn after being hit by competition from low-cost Chinese rivals and lower spending on network gear by global telecom operators.

French daily newspaper Les Echos reported last month that the government was trying to arrange a deal in which France Telecom would acquire part of Alcatel-Lucent's subsea cable unit, which was seen as a "strategic" asset.

The government was also mulling a deal in which the French FSI sovereign wealth fund would buy a stake in Alcatel-Lucent's cablemaking unit, according to the paper.

Richard also said on Monday that France Telecom was gearing up for a "difficult" year, adding that the economy would in all likelihood slow down, at least in Europe where France Telecom makes 90 percent of sales.