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Partners - Home The China Mobile contract is likely to give a boost to EPS Today Alcatel-Lucent announced a a $1B agreement with China Mobile enabling the Chinese carrier to shift to an all-IP mobile broadband network and to make an additional step towards the virtualization of the network. The move towards NFV is rather important as it demonstrates that Alcatel is not only vocal about the virtualization of the network but is starting to deliver the technology. NFV is a software-based solution enabling to reduce costs to operate the network and increasing the time-to-market for newer services. As such, NFV carries higher margins (we think in the low 80’s) and this contract is particularly important for group’s overall margins. We estimate this single contract could boost Alcatel-Lucent's revenues by 5% and earnings by c.10%. Consolidation wave across Europe an additional positive for Telecom Operators and Telecom Capex Consolidation could indeed spark the much needed market repair and rising earnings.