According to Bloomberg, Alcatel-Lucent is now worth less than the value of its patent portfolio.
Hit by competition from Chinese telecoms equipment manufacturers, Huawei and ZTE which have carved out a 30%+ share of the EMEA market, Alcatel-Lucent has been having a torrid time of it. Its market cap is now $7.8bn.
Back in 2000, the company’s market cap was €111bn.
As the value of Alcatel-Lucent fell, so the value of patents has soared.
Patent troll InterDigital’s market cap has soared to $3bn on rumours its sale may attract a bidding war between Google and Apple.
In June a consortium led by Apple paid $4.5bn for Nortel’s patents.
Alcatel-Lucent’s 18,800 US patents - many gained from its 2006 take-over of Lucent which owned Bell labs - are estimated to be worth $9bn.
Selling its patents would effectively mean the end of Alcatel-Lucent as a telecoms equipment supplier.
Market forces also look like putting an end to Alcatel-Lucent’s role as a telecoms equipment supplier.
The only thing which can change the situation is whether the French government and the EC decide to protect Alcatel-Lucent.
Alcatel-Lucent dare not make official complaints about its Chinese competitors to the EC because it wants to compete in China.
However the EMF union, which represents many Alcatel-Lucent employees, has asked the EU tell European network operators to take workers' rights and environmental practices of the manufacturers into account when ordering infrastructure equipment.