Alcatel is actively looking for a merger partner for its handset division, and its president Jacques Combet says its preference is for an Asian company. However, the French firm has no need to hurry its decision: it has already cut costs by outsourcing the manufacturing of its handsets to Singapore-based Flextronics.
The mobile handset business represents less than 10% of Alcatel’s sales, but it wants to remain in the industry. A merger would help to protect its position, while also cutting research costs and providing additional knowledge.
Alcatel can offer an Asian partner a strong base in Europe. It also expects to return to profit in the first half of 2002, following the reorganization of its handset division.