Born in the USA: Americanized Alcatel emerges from DSC deal

Alcatel completed its acquisition of DSC Communications last week and created a new identity in an attempt to recast its position in the U.S. market.

The newly combined company is called Alcatel USA and is headed by President and CEO Krish Prabhu, who was CEO of pre-acquisition Alcatel Network Systems. The company has reorganized into four new business divisions.

Alcatel's motivation since the strategy was announced in early June was to shore up its admittedly weak position in the U.S. carrier market (Telephony, June 8, page 9). Prabhu said last week that he expects Alcatel USA to take hold first among local carriers-both incumbents and newcomers.

"We are basically a non-entity in several of the Bell companies," Prabhu said. "And we could do a lot more to get some more mindshare-especially among the new breed of carriers."

The complementary product line the acquisition brings and the company's new organization should help address those issues, he said. "We now have critical mass in the U.S.," Prabhu said.

But one industry analyst disagreed with Alcatel's strategy, saying the DSC deal could create more headaches for Alcatel.

"DSC wasn't exactly hitting home runs," said Frank Dzubeck, president of Communications Network Architects. "DSC had some serious product problems, and Alcatel taking them over isn't necessarily going to solve them."

The acquisition of DSC will certainly not mark the end of Alcatel's efforts to plug product holes, Prabhu said. The company's next acquisition targets will likely be smaller data communications companies that might be allowed to develop somewhat autonomously, he said.

"I'm not necessarily looking to integrate them into our existing structure right away," Prabhu said.

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