In fact the photonic components sector is the one part of the communications business that has done a reasonable job in this consolidation regard, following Bookham's earlier absorption of both Nortel and Marconi component businesses, moves which may well have led Bookham competitor Avanex to look for similar opportunities to avoid being outgunned.

(As we should have learned over the last few years, despite managerial aspirations towards rationality, fashion has almost as much influence in business decisions as it does in the purchasing and donning of hats and shoes).

Some specific points worth noticing about the deal are that Alcatel is paying Avanex $110 million or so to take over its optical components business. On the one hand this suggests the unit is in very poor condition and Alcatel cannot wait to get rid of it - a view consistent with the way the group's sales have been collapsing over the last year, but an odd motive considering Alcatel's very strong position in optical equipment and therefore its own requirements. However, as it turns out, most of this money is to be used for restructuring or job losses, which under French law, the new Avanex must carry out, rather than it being done beforehand by Alcatel itself.

It is also worth noting that despite Alcatel's much larger share of the new entity, it will not be represented on the new Avanex board though Corning will be. This suggests that Alcatel feels the agreed supply contract provides adequate access and control. This view, if widespread, would no doubt cause Alessandrini's blood to run cold, encourage him to discard his winter coat and go for a solitary walk to the North Pole.

After all, one of the reasons that Alcatel Optronics has been suffering to the point of systematic torture is the degree of control its parent is perceived to retain, leaving Optronics completely out in the cold with many top tier customers such as Lucent. If the view amongst these customers is that Alcatel still partially "controls" the new entity, even though it has taken the Avanex name, the agreement is damn near useless. Not only would Alcatel's components continue to be refused consideration at these "cold-shouldering" customers, but the business currently conducted by either Avanex or Corning with these customers would also be in jeopardy.

In this case, truth means nothing whilst perception is everything.

The official position is clearly that Alcatel has retained its stake as a pure investment play, but one is reminded that Alcatel will remain the largest customer of the new entity for some considerable time, and, more practically, that alliances built up over many years are not psychologically disentangled even though they may be legally. It did, after all, take an optical generation to see Lucent and AT&T as separate entities, ditto Agere and Lucent, solved ultimately due to the sale of Agere's optical group to Triquint.

In any case, despite Alessandrini's enthusiasm, acquisitions are never easy at the best of times and conglomerations of small units with major pre-existing problems are probably the worst kind. Nominally the company would seem to have an as-merged sales level of just under $25 million a quarter ($11m + $8.2m + $5.4m). This is roughly comparable with Bookham's most recent $33 million, particularly if Alessandrini can achieve significant synergistic sales into his array of new customers - though there is also a tendency to lose business on such occasions as well, due to customer service problems at handover. But to put it into perspective, this is still way behind JDSU's $166 million.