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Technology

Alcatel-Lucent targets 5% operating margin in 2010

BARCELONA, Nov 19 (Reuters) - French telecoms equipment group Alcatel-Lucent ALUA.PA, which has posted losses for the past 12 quarters, expects a 5 percent operating profit margin for 2010, chief executive Ben Verwaayen said.

Verwaayen also repeated Alcatel’s forecast for the market to grow 0-5 percent next year, and said on Thursday the company planned further cost cuts in 2010 on top of its ongoing 750 million euro ($1.1 billion) cost cut programme.

“We are well on the way to do 750 million euros. Next year we will start all over again,” he said at an investor conference.

Alcatel-Lucent is struggling with major spending cuts by top customers and fierce competition from low-cost Chinese rivals, particularly in fixed-line networks which is its strongest business.

Alcatel competes globally with the likes of European rivals Ericsson ERICb.ST and Nokia Siemens Networks, as well as up-and-coming Chinese rivals Huawei [HWT.UL] and ZTE 0763.HK000063.SZ.

Analysts hope telecoms gear spending will pick up next year, led by mobile and particularly in Asia, but few expect a big bump in telecoms operators’ spending next year. (Reporting by Tarmo Virki; Editing by Dan Lalor) ($1 = 0.6722 euro)

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