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Qualcomm buys minority stake in Alcatel-Lucent, Combes plans similar deals

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July 30
7:50 AM 2013

As it posted strong sales growth in the first full quarter this year, Alcatel-Lucent announced that Qualcomm has bought a minority stake in their company. The deal, which will give the US chip maker less than 5% stake in Alcatel, is part of a research partnership between the two firms. For the struggling Alcatel, however, the deal is valued at about EUR 100 million to boost its research efforts. Chief Executive Michel Combes said he intends to replicate the Qualcomm deal with three to five more firms to fuel the firm's growth even more.

According to Combes, the demand for IP products grew in the first quarter, which helped propel Alcatel's profits. But Reuters reported that recovery for the company, which already lost more than USD 10 billion since its inception, "will depend in part on whether telecom operators increase overall spending in the coming years." The company will also have to slug it out with larger competitors like Nokia-Siemens Networks and Ericsson for contracts. A 2006 merger created Alcatel-Lucent.

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