Alcatel denies price gouging in Australia deal

30th May 2006, Comments 0 comments

SYDNEY, May 30, 2006 (AFP) - French telecommunications equipment group Alcatel Tuesday denied any involvement in unethical behaviour after being accused of price gouging over an Australian contract.

SYDNEY, May 30, 2006 (AFP) - French telecommunications equipment group Alcatel Tuesday denied any involvement in unethical behaviour after being accused of price gouging over an Australian contract.

The company was reacting to a report in The Australian newspaper Tuesday headlined "Alcatel admits gouging Telstra", referring to a deal with Australia's largest phone company between 1999 and 2003.

The newspaper quoted Alcatel's Australia chief Hilary Mine as saying in an exclusive interview that Alcatel made a "strategic error" in keeping prices for its Internet equipment too high, costing Telstra hundreds of millions of dollars.

"There was a period of rapidly falling prices globally. I wasn't here but my impression is that Alcatel made a strategic error in not adjusting its prices down at the rate they were falling globally," Mine was quoted as saying.

Within hours of publication of the report, Alcatel issued a statement of denial in Paris.

"Alcatel refutes any allegation of unethical behaviour related to its relationships with customers and considers it a key priority to maintain the highest standards in its business practices all over the world," the statement said.

"Price alone does not reflect the sole aspect of any contract, but factors such as the ability to match customer requirements, delivery terms, quality of service, integration capabilities are all important factors."

In the 1999-2003 contract with Telstra to supply digital subscriber line (DSL) technology "a tailored solution was created to meet the unique requirements of the customer," the statement said.

Concerns over that contract, which Alcatel lost to NEC in 2003, were raised after Alcatel won a new 3.4 billion-dollar-deal from Telstra to build a residential fibre and DSL network.

Copyright AFP

Subject: French news

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