Lucent May Sell Fiber Optics Unit
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Telecommunications equipment maker Lucent Technologies Inc. confirmed Wednesday that it is exploring several options for its Optical Fiber Solutions business, including selling the business or forming a joint venture.
The Atlanta-based Optical Fiber Solutions unit -- with 6,300 employees -- designs and manufactures optical fiber, fiber cable, specialty fiber components and fiber connectivity apparatus. Lucent, which has been hit hard by the faltering market, said its search for alternatives for the business is driven by its strategy to sharpen its focus on systems, software and services.
"We are taking this bold move so we can better focus our resources and investments on the areas critical to our markets, while making it easier for the fiber team to expand its customer base and make the capital investments necessary to meet the increasing global demand for fiber and fiber cable," said Bill O'Shea, executive vice president, corporate strategy and business development, Lucent.
O'Shea called Optical Fiber Solutions the leading player in its market, noting that it grew more than 60 percent in fiscal 2000.
"Lucent's Optical Fiber Solutions is a world-class player," O'Shea said. "This experienced, talented team has built a topnotch research and development capability and has the advantages of advanced manufacturing technology and a global presence."
Optical Fiber Solutions' products are attractive to buyers because they are "premium fiber," optimized for specific network applications, like long-haul telecommunications, metropolitan networks and undersea networks. To keep up with demand for its products, Optical Fiber Solutions has been in the midst of a $1 billion expansion, which involves what Lucent terms a "significant expansion" of its fiber manufacturing facility in Norcross, GA, and a new manufacturing facility in Campinas, Brazil, intended to serve Latin America and the Caribbean. The firm also has wholly-owned and joint venture facilities in Carrollton, GA, Massachusetts, North Carolina, New Jersey, Connecticut, Denmark, China, Japan, Russia and Germany.
"Demand for premium optical fibers continue to grow as communications providers build the light-powered, high-capacity highways they need to accommodate their customers' appetite for more and faster access to the Internet as well as better ways to transport data networking traffic," said Denys Gounot, president of Optical Fiber Solutions. "We currently have a $1 billion expansion plan underway, and, in addition, Optical Fiber Solutions has just commenced a new $250 million investment to enlarge our AllWave metro fiber production capacity at the Norcross facility. We need to do this to keep up with the burgeoning demand for AllWave fiber, which is specifically designed to maximize the earning potential of new metropolitan communications networks now being built."
The shift in focus is part of a larger restructuring for Murray Hill, NJ-based Lucent, which last month secured a $6.5 billion loan package in order to keep itself liquid. The company posted a $1.02 billion loss for the quarter ended Dec. 31, 2000 and said at that time that it will lay off 10,000 workers, a move which is expected to generate a restructuring charge of as much as $1.6 billion during the current quarter. As part of the loan agreement, the company, which has a cash balance of about $3.8 billion, agreed to limit losses over the next three quarters to $2.35 billion.
In related news, Lucent Tuesday unveiled the Lucent Mobile Experience, an integrated portfolio of software, products and service that allows mobile operators ways to introduce new services, including voice browsing, audio content aggregation, alerting and streaming capabilities, on current and third-generation (3G) wireless networks. The portfolio includes wireless network equipment, middleware, open APIs, Internet content, mobile Internet developer's kits, software applications, specialized tran