Alcatel-Lucent (NYSE:ALU), the unprofitable telecom equipment manufacturer with an average annual cash burn of more than 700 million euros, is overhauling its business in an attempt to stem its losses. Key among those changes are plans to sell off several of its most valuable assets, including its submarine-cable unit. But Alcatel-Lucent is also pursuing new contracts to revamp its business.
The Paris-based company announced Wednesday that it had secured an eight-year, $1 billion services contract with Reliance Communications to improve the service quality of its telecommunications networks in eastern and southern India.
This deal, Alcatel-Lucent’s first publicly-announced contract in India in seven months, shows that the Indian market is growing, said the company’s Asian Pacific regional president Rajeev Singh-Molares in a Mumbai press conference. In terms of the number of telecom subscribers, the country’s market is second only to China, but it is also a challenging market, with regulatory uncertainty making investments difficult.
Singh-Molares believes times are changing. “While the Indian market and the industry have had some challenges over the last two years, I think we’re turning the corner,” he said. “I think 2013 will be a year of more stability and back to growth. Back to expanding the kinds of services consumers will be getting.”
The company’s most recent Indian contract, with Bharti Airtel, was announced last May.
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