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Alcatel-Lucent says remains key AT&T supplier

PARIS (Reuters) - Alcatel-Lucent ALUA.PA said on Friday it remained a "critical supplier" of 3G wireless technology to AT&T T.N, responding to a Financial Times report that it could lose some business to rival Ericsson ERICb.ST.

Alcatel-Lucent Chief Executive Patricia Russo speaks during the company's annual general assembly in Paris, June 1, 2007. Alcatel-Lucent <ALUA.PA> may lose some business with AT&T <T.N> to Ericsson <ERICb.ST> as its Swedish rival capitalizes on its difficulties in bolstering its leading position in mobile phone infrastructure deals based on 3G wireless technology, the Financial Times reported. REUTERS/Benoit Tessier

“We continue to be a critical W-CDMA supplier to AT&T,” the French-American telecoms equipment group said in a statement.

“Our market share has remained relatively stable, and we continue to work to meet our commitments to maintain our market share. To speculate otherwise is both inaccurate and misleading,” Alcatel-Lucent added.

Alcatel-Lucent shares fell more than 3 percent after the Financial Times reported on Friday that Ericsson had taken advantage of Alcatel-Lucent’s difficulties in the 3G wireless market to win more business from AT&T.

The shares, already battered last month by a profit warning, later recovered and closed down 0.8 percent at 7.15 euros.

AT&T awarded a $2 billion contract in 2004 to Ericsson, Lucent and Siemens SIEGn.DE to supply 3G infrastructure for its U.S wireless network, the Financial Times had said.

Under the original terms Ericsson was to get about $900 million, Lucent $700 million and Siemens $400 million.

But Ericsson’s share of the contract would exceed 50 percent, the paper said, citing people familiar with the situation.

“After delays by Alcatel to deliver WCDMA technology equipment, Ericsson stepped in,” the paper said.

It also said AT&T had considered reducing its suppliers to two by dropping Alcatel-Lucent but had decided for now to retain all three, subject to review.

Alcatel-Lucent, created in December by the takeover of U.S.-based Lucent by France’s Alcatel, has been dogged by merger-related costs and uncertainty over product integration.

It has issued three profit warnings in less than 10 months, the latest on September 13.

Alcatel shares have fallen around 34 percent since the start of 2007.

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