Alcatel-Lucent woes company-specific, not sectoral

By Georgina Prodhan

LONDON (Reuters) - The latest sorry chapter in the Alcatel-Lucent story dented shares in other telecoms gear makers on Tuesday, but analysts said they were likely to benefit, if anything, from the Franco-American group's problems.

Alcatel-Lucent's chief executive and chairman both resigned on Tuesday, bowing to persistent shareholder pressure after another quarter of big writedowns of assets inherited from Lucent in the 2006 merger that created the company.

The group repeated its downbeat forecast for a flat telecoms equipment market this year, blaming a deterioration in the economic environment and saying it saw signs of a slowdown in spending spreading from the U.S. to Europe.

Shares in fellow telecoms gear makers Ericsson and Nokia, which owns half of the Nokia Siemens Networks joint venture, fell as some investors fretted that the already depressed sector had further to fall.

But many analysts said that though the market remained tough, the firm's particular problems were largely of its own making and could benefit rivals.

"It's an Alcatel-Lucent problem, quite specifically," said Nicolas von Stackelberg, telecoms analyst at private bank Sal. Oppenheim. "At Ericsson and Nokia Siemens Networks, sales have grown quite nicely."

Alcatel-Lucent said spending on CDMA, a legacy technology still relatively widespread in North America and parts of Asia but little used elsewhere, had fallen faster than planned.

It continued to bet on CDMA, Lucent's former great strength, despite declining sales, and has written down its CDMA assets several times. Lucent was once the world's biggest telecoms gear maker, and it fell hard when the telecoms bubble burst.