Lucent Technologies Inc.'designs and delivers the systems, services and software
that drive next-generation communications networks. Backed by Bell Labs research
and development, we rely on our strengths in mobility, optical, software, data
and voice networking technologies, as well as services, to create new revenue-generating
opportunities for our customers, while enabling them to quickly deploy and better
manage their networks. Our customer base includes communications service providers,
governments and enterprises worldwide.
We were incorporated in Delaware in November 1995. We were formed from the
systems and technology units that were formerly a part of AT&T Corp. ('AT&T'),
including the research and development capabilities of Bell Laboratories ('Bell
Labs'), and were spun off by AT&T on September 30, 1996. Our principal executive
offices are located at 600 Mountain Avenue, Murray Hill, New Jersey 07974 (telephone
number 908-582-8500).
We remain primarily focused on addressing the needs of the leading service
providers throughout the world. Telecommunications spending remains highly concentrated
with the 50 largest service providers responsible for approximately 75% of spending
on equipment and services. In addition, the top 20 countries still account for
more than 90% of all capital spending by service providers. We are organized
to address service providers' needs globally through two distinct operations:
Integrated Network Solutions ('INS'), which is focused on wireline service providers
and Mobility Solutions ('Mobility'), which is focused on wireless service providers.
In INS, we are focused on the most immediate and most profitable opportunities
in our key areas of strength, which include voice networking, data and network
management and optical networking. We work closely with our customers to ensure
that our research and development resources are focused in the areas that are
important to them. We continue to enhance existing platforms by adding key feature
functionality. For example, our 5E-XCTM high-capacity switch improved our embedded
base of class 5 switches not only by increasing capacity, but also by adding
capabilities that allow a cost-effective migration from circuit to packet. Additionally,
in emerging product areas such as metro optical, we introduced new hardware
and software products that add functionality to the embedded base.
In Mobility, we plan to lead the migration to next- or third- generation wireless
networks, often referred to as 3G, across both CDMA2000 and Universal Mobile
Telecommunication System ('UMTS')' industry standards. Both of these 3G standards
leverage Code Division Multiple Access ('CDMA') technology, which is also known
as spread spectrum because it spreads digital calls efficiently and securely
across the available frequency spectrum. We believe that we are the leader in
spread spectrum technology, and we continue to believe that the key to widespread
deployment of 3G networks centers on meeting the enterprise and mass-market
consumer demand for high-speed mobile data services and low-cost voice services.
These services offer the promise of profitable new revenue streams for service
providers and provide financial justification for the significant investments
in network upgrades to 3G systems.
Lucent Worldwide Services ('LWS') is leading our strategic effort to become
the network integrator of choice for service providers. LWS is positioned to
take advantage of the large and burgeoning market for telecommunications support
services, which includes professional services, deployment services, maintenance
services and managed services. We intend to increase our international presence
and capabilities and have plans to penetrate new markets adjacent to the core
service provider market, such as government, enterprise and cable.
As part of our growth strategy, we have established our Global Business Partner
program to complement our direct sales force. Our Global Business Partner program
focuses on using indirect-channel partners, who are third parties that resell
our products and services to customers who are not served by our direct sales
force. By using indirect-channel partners, we can reduce costs and reach new
markets by increasing our market coverage beyond the traditional service provider
market and extending our sales reach in selected geographical areas. We have
maximized our sales efforts by aligning our indirect-channel partner sales efforts
with our direct sales efforts, thus ensuring that customers' experiences are
consistent and achieving cost savings by consolidating marketing and operational
support. This program provides us with the opportunity to enter into markets
beyond the traditional service provider market, such as the government, enterprise
and cable markets.
We are also focused on becoming the leading 'network integrator' partner for
service providers. We will continue to integrate our own products and those
of other vendors into end-to-end network solutions for customers. We have been
and will continue seeking out and developing partnerships, such as our established
relationships with Juniper and Cisco, in line with our strategy of providing
integrated end-to-end carrier grade solutions for our customers. And, we will
continue to establish strategic alliances with select industry leaders, such
as our established alliances with EMC, Sun Microsystems and others, to extend
our reach and creatively approach new markets. Through such partnerships and
alliances, we are continually expanding our opportunities, not only in the service
provider market, but also in new markets such as government. We plan to expand
our capabilities in this area and believe that we are in a strong position to
gain share in this growing market.
COMPETITION
The global telecommunications networking industry is highly competitive. Our
current principal competitors include Alcatel, Ciena Corporation, Cisco Systems,
Inc., LM Ericsson Telephone Company, Fujitsu Limited, Huawei Technologies, Motorola
Inc., NEC Corporation, Nokia Corporation, Nortel Networks Corporation, Samsung
Networks Inc. and Siemens AG. Some of our competitors, such as Alcatel and Nortel,
compete across many of our product lines, while others compete in a smaller
subset of our products.