Business Blog: Hoover’s Business Insight Zone

Ever since the collapse of the dot-com bubble at the beginning of this decade, the overlapping businesses of telecom and network equipment have been a big minefield. Companies like Nortel Networks have struggled for so long that it’s almost hard to remember back to the days when they were considered strong.

It’s been less than a year since Alcatel and Lucent merged their operations to become the inelegantly named Alcatel-Lucent.* So far, though, the vaunted synergies that were supposed to make the merger a success have yet to materialize. The latest: “Alcatel-Lucent revised its 2007 sales forecast lower Thursday for a third time this year…” Not that the company admits bigger problems for the merger:

But Caroline Guillaumin, an Alcatel-Lucent vice president for corporate communications, rejected assertions that the merger was off to a slow start, saying the company was on track to meet its cost-cutting objectives.

While it wouldn’t quite be fair to the rest of the telecom equipment industry, you could be forgiven for thinking that Cisco and Nokia are the only two really good companies anywhere in the sector. Merging two of the so-so ones — even under the guidance of a capable executive like the former Lucent CEO Patricia Russo — doesn’t seem like a recipe for dominance now any more than it did last year when the companies joined forces.

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* Does anyone else find it ironic that two companies with intentionally iconic, slick-sounding names now find themselves burdened with such a clunker of a combined name?