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Alcatel to spend millions in 3G push

The telecom equipment maker is proceeding with plans to establish third-generation labs in Asia and Europe despite intentions to cut 20,000 jobs worldwide.

Alcatel, the telecommunications equipment maker, is proceeding with plans to establish seven next-generation labs in the Asia-Pacific region and Europe despite intentions to cut 20,000 jobs worldwide.

Called 3G Reality Centers, each facility will cost the company millions of dollars, said John Lipp, Alcatel Asia-Pacific's director of business development for mobile Internet.

The labs in Korea, Japan, Australia, France, Italy, Germany and the Netherlands are slated for launch by mid-2003, Lipp said in an e-mail. The company already operates five such centers in Malaysia, China, Taiwan, Portugal and Sweden.

With live third-generation networks and engineering expertise, the centers will provide developers an environment to create and test General Packet Radio Service (GPRS) and 3G applications, primarily aimed at communications, entertainment and business segments.

It is Alcatel's ultimate goal to attract mobile phone operators to these labs, where its products as well as upcoming GPRS and 3G services will be showcased. Lipp declined to reveal sales projections. Alcatel's products range from routers, switches and base stations to mobile payment and multimedia messaging software.

Despite slashing massive numbers of jobs, Alcatel's Asia-Pacific spokesman Lim Seng Jin said the company is taking a "long-term view" with regard to its 3G investments.

"Our network of 3G centers is necessary as we are confident that mobile broadband will be a key driver of telecommunications services in the future," Lim said.

The job reductions, announced Friday, come on top of 30,000 job cuts previously announced for 2001 and 2002. By the end of 2003, Alcatel's global work force is expected to drop to 60,000 from 113,000 at the end of 2000, according to Reuters.

Lim declined to reveal the number of workers who will lose their jobs in the Asia-Pacific region. Alcatel has 10,000 people on its payroll in the Asia-Pacific, including employees from Alcatel Shanghai Bell, a joint venture with Chinese telecom Shanghai Bell.

CNET Asia's Irene Tham reported from Singapore.