With the confirmation of reports that Lucent Technologies is in merger talks with France's Alcatel, the telecom industry is girding itself for an attack from the same "patriotic protectionists" who derailed the Dubai Ports World deal. "With protectionist sentiment growing in both the U.S. and Europe, a merger could prove a critical test of cross-border cooperation for the French and U.S. governments," Lucent CEO Patricia Russo summed up in a quote in Monday's Wall Street Journal.
Before opportunistic legislators begin to raise alarms about the national telecom infrastructure falling into foreign hands, they would do well to remember that Alcatel has been supplying U.S. companies for two decades. In North America alone, the company had of Ä1.8 billion ($2.2 billion) in sales in 2004 and has more than Ä2.2 billion ($2.6 billion) in assets. It is the leading supplier of DSL equipment in the U.S. and among the worldwide leaders in fiber optic and Internet Protocol networking technology.
Meanwhile Lucent, while a major U.S. supplier, has struggled to establish itself in international markets where Alcatel has thrived. Consolidation with Alcatel would open China, Europe and the Middle East to U.S. manufactured products.
If completed, a Lucent-Alcatel merger would be good for investors and workers in the U.S. telecom industry, as well as improving U.S. technological competitiveness in the global market.