Alcatel-Lucent continued to make a loss in the third quarter and revenues fell as the France-based vendor said it is moving on from cost reduction to focus on innovation.

The vendor made a net loss of €18 million in the three months to September, but margins increased to 34 percent, up from 31.9 percent last year.

Group sales fell 5.9 percent year-on-year to €3.2 billion, with A-L’s Access business unit down 7.5 percent to €1.8 billion.

There were falls in both fixed and wireless access revenues as the number operator roll-outs decreased.

The vendor said it added three new small cell customers during the quarter, bringing the total to 74, as well as five VDLS2 vectoring customers for a total of 27.

Its Managed Services business saw sales halve to €97 million as it continued to pull back from this area.

Core Networking sales fell 3.9 percent to €1.4 billion as IP Transport and IP Platform revenues fell 3.3 percent and 14 percent respectively.

A-L said the said the declines reflected its shift towards IMS and VoLTE technologies.

Sales of IP routing products grew 2.2 percent to €594 million following contract wins in China, while its SDN business Nuage Networks added four new wins.

From a geographical point of view, revenues in Europe and North America were down 13.5 percent and 14 percent respectively. However, Asia-Pac posted 22.5 percent growth.

Meanwhile, the company said it was two-thirds of the way to hitting its Shift Plan objective of reducing fixed cost savings.

CEO Michel Combes said he had “opened the second chapter” of The Shift Plan, with a sharper focus on applying innovation to unlock growth.

He commented: “Since the launch of The Shift Plan, our primary objective is to enable the company to generate free cash flow on a sustainable, recurring basis, starting in 2015. Our third quarter results show that we are increasingly improving our underlying profitability, an important step towards this commitment.”

 

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