Alcatel-Lucent CEO Michel Combes said a proposed take over by Nokia Networks is not affected by the companies' respective earnings in the opening quarter, after the French-U.S. equipment vendor's net loss increased year-on-year.
Alcatel-Lucent reported that it saw first-quarter access unit revenues rise 13 percent year-over-year to $2 billion.
Alcatel-Lucent said it is still dealing with lower carrier spending in the U.S. but still managed to boost its overall revenue in the first quarter and improve its gross margins on higher sales of software products.
The next generation of wireless known as 5G will provide at least 10-fold improvement in the user experience and must be able to handle low-cost devices across the whole range of 5G frequency bands, according to Nokia Networks.
Nokia reported stronger sales in North America in the first quarter, and in its networks business overall. However, the underlying profit of the company's networks business fell, and investors grew worried about drooping margins.
Verizon Communications will move to a software-centric network architecture to reduce costs and deliver new services to customers faster. The company today announced that Alcatel-Lucent, Cisco Systems, Ericsson, Juniper Networks and Nokia Networks will be its five initial software-defined network vendors.
Verizon is implementing software-defined networking throughout its networks to improve service timelines. For the company's wireline network, the initial focus will be on migrating legacy elements and functions onto software-based platforms.
Nokia's integration of Alcatel-Lucent following the proposed acquisition of its rival will be difficult and messy. Some significant rewards will take many years to achieve, if ever. However, very large research and development demands with economies of scale and scope in 4G, 5G and with fixed-mobile network convergence make this kind of transaction inevitable and indispensable.
Service providers' continual hesitation about how to implement software-defined networking (SDN) into their networks continued to be a drag on the service provider router and switch market as 2014 total revenue remained flat at $14.6 billion.
Is Nokia Networks' $16.6 billion acquisition of Alcatel-Lucent all about becoming a 5G powerhouse? Some analysts believe that's the case.