France’s Alcatel and USA-based Lucent Technologies have lots of reasons to stick with their old names after they complete their $13.5 billion merger. Several hundred million reasons, perhaps.

When Alcatel unveiled its acquisition of Lucent earlier this month, Alcatel Chief Executive Serge Tchuruk said that the two telecom-equipment giants would “choose a name later on.”

Yet rebranding a large corporation costs a lot of money. For example, some analysts estimate that the former SBC Communications is spending as much as $1 billion to rename itself AT&T Inc. after acquiring the old Ma Bell brand in November.

“Branding is not cheap”
Jay Pultz, senior communications analyst, Gartner.

Lucent and Alcatel also have other priorities: They need to integrate two large organizations on opposite sides of the Atlantic, trim 10% of their combined workforce of 88,000 and find other ways to cut expenses to make the transaction pay off for investors. [3G!]

Read more: Cellular News

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 Print Posted by Budi Putra on April 18th, 2006