Alcatel-Lucent shares fell by more than 2% in early trading this morning after a report in the Financial Times said the telecom networking company is losing business to rival Ericsson. The paper reported that AT&T was doing more business with Ericsson.
In 2004, AT&T awarded a $2 billion infrastructure contract to Ericsson, Lucent and Siemens to upgrade its U.S wireless network. Under the original terms of the deal, Ericsson was to get about $900 million, Lucent $700 million and Siemens $400 million, but according to the paper, Alcatel-Lucent delayed delivering the 3G technology and Ericsson "stepped in." Ericsson's portion of the contract now exceeds 50%.
The report also said that AT&T had considered dropping Altactel-Lucent from the contract entirely, but so far has kept the network supplier.
In the report, Alcatel-Lucent responded by saying "We continue to be a critical WCDMA supplier to AT&T."