Alcatel Hurts on 3G ‘Pricing War’

Alcatel Inc. reported strong growth in its fixed-line business during the first quarter, but intense competition in mobile network equipment sales hurt the company’s operating margin, which rose to 6.5 percent from 4.1 percent a year ago, but fell below analyst expectations of 8 percent.

The French equipment vendor posted first-quarter net profits of $129.1 million from sales of $3.8 billion. In the year-ago quarter the company posted net profits of $129.8 million from sales of $3.2 billion.

“Alcatel has once again turned in a solid quarter with strong revenue growth, and improving margins,” stated Serge Tchuruk, chairman and chief executive officer of Alcatel. Tchuruk pointed out that rising demand for “triple-play” services, combining Internet, phone and TV offerings, was responsible for driving up the company’s fixed-line equipment sales. [3G!]

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