Alcatel to be free cash flow positive in 2011-paper

PARIS, Sept 17 (Reuters) - Telecom gear maker Alcatel-Lucent ALUA.PA will generate free cash flow in 2011 and is sticking to its market and margin forecasts for 2010, Chief Executive Ben Verwaayen told French daily Le Figaro.

The Franco-American group reiterated its 2010 cash flow breakeven and profit targets in July despite an industry-wide chip shortage that is crimping sales and forcing it to spend cash on buffer stocks.

The group expects 0 to 5 percent market growth and is aiming for an adjusted operating margin of 1 to 5 percent for 2010.

Carriers are beginning to spend more to support increasing Internet traffic, particularly from smartphones, after holding back during the financial crisis. (Reporting by Cyril Altmeyer; Editing by Hans Peters)