Alcatel Creates Israel Bell Labs Center to Bolster Cloud Effort

Alcatel-Lucent (ALU) plans to open a Bell Labs research center outside Tel Aviv to help the French network-equipment maker advance in cloud technology against competitors including Ericsson AB (ERICB) and Nokia Oyj.

The facility in Israel “will contribute tremendously to Alcatel-Lucent playing a shaping role in the industry,” Chief Executive Officer Michel Combes said in a statement.

Combes, who took over last year, is focusing on innovation to turn around the company after years of losses following the 2006 merger of Alcatel SA and Lucent Technologies Inc. He plans to narrow research to focus on fast-growing technologies, including cloud-based architectures.

“We know that great new discoveries and innovations in ‘cloud networking’ will emerge from our new Tel Aviv office,” Bell Labs President and Alcatel-Lucent Chief Technology Officer Marcus Weldon said in the statement.

Alcatel-Lucent, based in Boulogne-Billancourt, France, is promoting innovation to speed the release of new products. Ericsson, Nokia and Asian vendors such as Huawei Technologies Co. are also emphasizing cutting-edge technology, rather than relying on lower prices to win customers.

The Israeli Bell Labs center will be based in a building in Kfar Saba, outside Tel Aviv, that already houses an Alcatel-Lucent cloud-technology facility. Israel’s commercial hub is the world’s second-best startup area behind Silicon Valley, according San Francisco-based Compass Inc., which collects data on technology companies.

Alcatel-Lucent also runs the Nobel-prize-winning Bell Labs center in Murray Hill, New Jersey, as well as research sites worldwide including facilities in Villarceaux, France; Antwerp, Belgium and Shanghai.

To contact the reporters on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net; Marie Mawad in Paris at mmawad1@bloomberg.net

To contact the editors responsible for this story: Andrew J. Barden at barden@bloomberg.net; Kenneth Wong at kwong11@bloomberg.net Robert Valpuesta, Tom Lavell

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