Alcatel to overhaul Telstra network

15th November 2005, Comments 0 comments

PARIS, Nov 15 (AFP) - French telecom equipment manufacturer Alcatel said on Tuesday that it had signed a draft agreement to design and build a communications network for Australian telecoms giant Telstra, the second multi-billion-euro contract for the French group in a month.

PARIS, Nov 15 (AFP) - French telecom equipment manufacturer Alcatel said on Tuesday that it had signed a draft agreement to design and build a communications network for Australian telecoms giant Telstra, the second multi-billion-euro contract for the French group in a month.

The deal, which is to be finalised through a formal agreement between the companies, would be worth EUR 2.18 billion over five years, Alcatel said in a statement.

On the Paris stock exchange, shares in Alcatel were showing a gain of 4.18 percent to 10.47 euros in mid-day trade. The CAC 40 index of leading shares fell 0.04 percent.

"This (latest) success strengthens the position of Alcatel as a preferred supplier to provide operators with new generation telecommunications solutions," said analysts at brokerage Natexis Bleichroeder in a note.

An analyst from another Paris-based brokerage, who asked not to be identified, said: "This contract gives credibility to, firstly the quality of Alcatel's portfolio of products, secondly the position of Alcatel across a range of fixed products, and thirdly the importance of its position as a network integrator."

In October, Alcatel won a contract worth US $1.7bn (EUR 1.46bn) to upgrade part of the network of US-based SBC Communications with fibre-optic technology.

Alcatel said its success with Telstra illustrated "the trend of the leading operators to select a few key partners as they transform their networks".

Telstra, the biggest telecoms group in Australia, is planning an extensive overhaul of its communications network to enable it to transmit all of its voice and broadband Internet data via a single Web-based system.

Alcatel said that the five-year contract would be to design, integrate and maintain this Internet Protocol system which the Australian group hoped would reduce costs for customers.

The French group said that the two groups had signed a "memorandum of understanding" and would proceed to negotiate "formal agreements to reflect their strategic partnership".

Swedish telecoms group Ericsson and US-based Cisco Systems were also expected to be involved in the project, Alcatel said.

Also on Tuesday, the newly installed chief executive of Telstra, Sol Trujillo, said that the Australian group planned to cut up to 12,000 jobs over the next five years as part of a major restructuring effort.

Trujillo, who took over in July, also issued the third profit warning of his tenure and outlined the results of a strategic review of the company, which the Australian government hopes to privatise fully.

After two previous sales of shares in the company, the government still holds a 51.8-percent stake.

Since Trujillo took over, Telstra has repeatedly warned of the need for change owing to falling revenue from fixed-line services, intensifying competition in the mobile phone market and "excessive" government regulations.

Copyright AFP

Subject: French news

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