Lucent Technologies on Friday released a brief statement which confirmed that it is in merger talks with Alcatel. It would be a $33 billion dollar deal if Murray Hill, N.J.-based Lucent and Paris-based Alcatel are able to iron out the details and avoid the problems that led to an earlier failure in merger talks.

We can confirm that Lucent and Alcatel are engaged in discussions about a potential merger of equals that is intended to be priced at market. There can be no assurances that any agreement will be reached or that a transaction will be consummated. We will have no further comment until an agreement is reached or the discussions are terminated.

The two companies previously discussed the possibility of a merger in 2001, but an agreement was never reached. The merger would help both companies fend off inroads made by Huawei Technologies Co. and ZTE Corp. while also keeping at bay industry stalwarts like Siemens AG and Ericson.

Alcatel and Lucent might also produce a strong services business, a recent focus for both, Marcus said. Around 30% of Lucent's sales in Europe come from professional and managed services, higher than its global average of 25% or the industry average of 15%, he said. Alcatel's services earnings are slightly higher, and its focus on IP network transformation would nicely complement Lucent's maintenance and support services work, he said.

Lucent's strengths lie in its North American operations, while Alcatel's strengths are in Europe and Asia.