Alcatel-Lucent continues to reap operational benefits from its ‘Shift’ plan, while LTE rollouts in US and China helped strengthen the company’s top line in Q214.

The second quarter saw the company reducing fixed costs by €94 million (US$126 million). It takes cumulative fixed cost-savings, under the Shift plan, up to €572 million.

The plan, hatched by CEO Michel Combes last year, has the target of cutting costs by €1 billion and drumming up €1 billion in asset sales as it focuses on cloud computing, ultra-broadband and IP networking.

Cost-savings helped boost gross profit margin to 32.6 per cent, while adjusted operating income trebled to €136 million.

Significantly, Alcatel-Lucent’s access business, driven by 4G growth in the US and China – and which accounts for around 60 per cent of group turnover – moved into profitable territory (€11 million).

True, this is on an adjusted operating income basis, but it is still better than the previous quarter loss of €37 million, and much better than the Q213 loss of €75 million.

Operational improvements were not enough to prevent a sizeable net loss of €298 million for the period. Although this was much smaller than the €885 million net loss posted a year earlier.

On a like-for-like basis, Alcatel-Lucent said group sales were up 0.7 per cent, to €3.28 billion. If you take out the decline in managed services revenue – the company is in the process of terminating or restructuring loss-making contracts – then group revenue, year-on-year, would have increased by five per cent.

Sales from the Asia-Pacific region were up an eye-catching 25.2 per cent, to €667 million, driven by LTE network rollouts in China. The performance helped cushion a 10 per cent drop in core IP networking revenues, to €1.37 billion, on a group-wide basis.

Alcatel-Lucent said it would pay back a €1.6 billion loan next month, which was taken out in 2012 and secured against group patents.

To raise more money, an IPO of Alcatel-Lucent’s submarine networks division is planned for H115, although the company will maintain a majority stake.

Facebook has launched an app providing a range of free basic Internet services to mobile users in emerging markets, as part of its Internet.org initiative.

The Internet.org app being launched in partnership with Airtel in Zambia offers a number of health, employment and local information services without users being charged for consuming data.

These services include globally-recognised products such as AccuWeather, Facebook, Google Search, Messenger, Wikipedia, as well as more locally relevant services such as government information app eZeLibrary, Go Zambia Jobs, Kokoliko chat, WRAPP (Women’s Rights App) and Zambia uReport, a free HIV and sexual health advice service.

Airtel customers can also access these services via the Internet.org website, as well as the Facebook for Android app. Facebook plans to improve the experience provided by the product as it is rolled out in other markets.

Facebook’s Internet.org initiative was launched a year ago with the aim of bringing connectivity to the five billion people around the world currently without access to the Internet.

Founding members Facebook, Ericsson, MediaTek, Nokia, Opera, Qualcomm and Samsung, as well as academics and NGOs, have been looking to develop and adopt technologies that make mobile connectivity more affordable and reduce the cost of delivering data.

Facebook boosted its efforts to reduce the cost of mobile Internet access in June by agreeing to acquire Pryte, a Finnish company giving mobile users without data plans the ability to buy data on a per app basis.

The Internet.org initiative has also seen Facebook invest in drones and satellite technology with the aim of extending Internet connectivity.

Samsung announced an anticipated drop in profit for its mobile unit, off the back of lower smartphone and tablet shipments and increased costs.

The South Korean company cited decreases in its “mid- to low-end” smartphone shipments, due to weak demand in the EU and lower 3G demand alongside intensified price competition in China.

Tablet shipments were also down due to an overall weakness in the market, including a slowed demand for replacement devices.

Costs increased due to the ramp-up in sales of its latest flagship smartphone, Galaxy S5, and inventory reduction activities.

The company also said that earnings were down sequentially in its networks business, due to decreased LTE investments in domestic and overseas markets under “low seasonality”.

Operating profit in Samsung’s IT & Mobile unit, where mobile accounts for the vast majority of sales, decreased by 29.6 per cent to KRW4.42 trillion (US$4.23 billion), on sales of KRW28.45 trillion, down 19.9 per cent.

While Samsung does not give out details of device volumes, Strategy Analytics estimated that Samsung’s shipments were 74.5 million units during Q2, down from 76 million a year earlier. The handset manufacturer’s market share dipped to 25 per cent from 33 per cent, although it is still comfortably ahead of second-placed Apple.

Looking forward, Samsung said it expects smartphone and tablet shipments to grow during the second half of 2014, under “strong seasonality”.

For smartphones, high-end demand will be led by TD-LTE expansion in China, and lower inventory levels in Europe. Emerging markets will drive growth further down the range, although the company also warned of intensified competition with new product launches.

Tablet demand is expected to grow under strong seasonality (especially during the Christmas holiday sales period) and with new model launches, although again price competition is expected to intensify.

On a group level, the company reported a net profit of KRW6.25 trillion, down 19.6 per cent year-on-year, on revenue of KRW52.4 trillion, down 8.9 per cent.

Nokia Networks today announced it has entered into a memorandum of understanding to acquire part of the wireless networks business of Panasonic System Networks Company Limited. The agreement covers Panasonic’s mobile phone (LTE/3G) wireless base station system business for mobile operators and related wireless equipment system business.

The two parties plan to conclude the agreement by the end of September 2014, with expected closure scheduled on January 1, 2015, subject to customary closing conditions, including regulatory approvals. Under the terms of the agreement, fixed assets and business contracts with Panasonic’s customers are being transferred to Nokia Networks in Japan, including Panasonic employees involved in the business.

Through this acquisition, Nokia Networks aims to reinforce and further improve efficiency and quality control for product development and R&D, as well as strengthen its market share for base station systems and related wireless equipment in Japan. In addition, Nokia Networks plans to leverage its extensive global experience and technical leadership in mobile broadband to grow its business in the acquired domestic carrier segment globally.

Media reports in India suggest MTN Group is looking to break into the Indian market through the acquisition of struggling telco Tata TeleServices (TTSL). An unnamed source claimed that talks were still in the early stages, whilst a corporate lawyer who advised Tata regarding the sale of DoCoMo’s stake in the company confirmed that MTN had completed two rounds of preliminary discussions.

MTN has in recent years attempted to enter the Indian market through deals with Bharti Airtel and Reliance Communication (RCOM), although the talks ultimately came to nought. The rumour mill was spurred on earlier this week by the announcement from the chairman of Mumbai-based industrial group RPG Enterprises who said that MTN was carrying out due diligence on a large Mumbai-based telecom firm. Whilst TTSL has been identified as the most likely candidate for a potential takeover, RCOM and Aircel were also suggested as potential candidates.