Huawei again shoots down AlcaLu union rumors

For the second time in the span of two weeks, rumors of a marriage between Chinese vendor Huawei and Alcatel have been squashed. A report in French magazine Challenges--one that Fierce Wireless revealed did not cite any credible sources--claimed the two vendors were in line to develop a partnership, but had no interest in a merger.

"The reports are inaccurate. Huawei is not in discussions with Alcatel-Lucent," said Huawei spokesman Ross Gan in a Reuters report. Alcatel-Lucent said it would not comment on the issue.

The latest rumor follows an earlier Reuters report late last month that Alcatel-Lucent was seeing acquisition interest from an unnamed Chinese vendor, one many industry watchers believed was Huawei.

Rumors of such a marriage come at a time when Alcatel-Lucent and its European telecom vendor counterparts are seeing increased competition from lower-cost equipment providers such as Huawei and ZTE in both wireless and wireline segments.

Despite ongoing pressure from its competition, AlcaLu CEO Ben Verwaayen gave an upbeat report to Dow Jones about its profitability through 2011, but would not answer questions about any partnership or merger with Huawei. Speaking at the World Economic Forum in Dalian, Verwayen said that the vendor thinks it will break even in 2009 and then become increasingly profitable by 2011.

"We are still on track to meet those targets," he said in an interview.

For more:
- here's the latest Reuters report
- Dow Jones/Wall Street Journal had reported Verwaayen's outlook

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