ATM and POS manufacturer, NCR Corporation NCR and Alcatel-Lucent ALU have teamed up to take worldwide delivery of managed services to the next level. The two firms have formed an alliance to bring global standards to managed services delivery for Alcatel-Lucent’s customer base and technology executions.
As per the deal, NCR’s integrated service delivery will provide Alcatel-Lucent with application support services, designed to enhance the connectivity of 3G, 4G LTE (Long Term Evolution) and Wi-Fi networks in both offices and homes globally.
NCR, a leader in consumer transaction technologies, will also conduct surveys, and oversee arrangement and maintenance of projects to drive operational efficiencies, enhance the quality of service and enable virtualization.
These managed services will support mission-critical applications (including small cells, IP/MPLS, and GPON deployments) spanning multiple lines of business and functional areas, such as procurement, supply chain, forecasting, sales and financial management, thereby improving operational efficiency, driving business effectiveness and providing superior customer experience.
Alcatel builds next generation networks, delivering integrated end-to-end voice and data communications solutions to established and new carriers, as well as enterprises and consumers worldwide.
Alcatel-Lucent has been making persistent efforts to strengthen its position in the booming small cell market. Rising demand for high speed data from users of advanced mobile devices like smartphones and tablets has made it necessary for operators to upgrade their networks. The collaboration will help Alcatel-Lucent customers to leverage NCR’s overall footprint and expertise, thereby reducing time-to-market and improving cost effectiveness.
On the other hand, NCR will benefit from Alcatel-Lucent’s network capability and wide knowledge of communication technologies. We believe that the deal will fortify the global reach of both the companies and attract new customers, thereby creating new revenue opportunities.
Apart from this deal with Alcatel-Lucent, we also believe that NCR’s continuous contract wins will allow it to grab greater market share, going forward. Furthermore, NCR’s commitment to protect the trust and integrity of the ATM channel has led banks and a host of other financial institutions to choose its services.
However, similar offerings from the likes of Diebold Corp. DBD and International Business Machines IBM could create some pressure.
Moreover, NCR has a highly leveraged balance sheet and generates minimal cash flows. The company had a long-term debt of $3.42 billion (debt to capitalization ratio of 68%) at the end of second-quarter 2015. Moreover, during the quarter, it generated free cash flow of only $95 million.
Currently, NCR has a Zacks Rank #3 (Hold).
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