Alcatel Lucent is on the up-and-up after after being almost Down-and-Out in Paris (and London) a year or so ago. The company's share price has tripled since the end of April and it will reclaim its former place in the CAC 40 in January as the chipmaker STMicro slips down the rankings and falls from grace and general view. STMIcro's share price has collapsed by 25 per cent since the summer.

A return to the index would not only signal a remarkable bounce-back - after all, Alcatel (not the arriviste Alcatel Lucent) was a founder member when the CAC was created 25 years ago - but also benefit the company in various material ways as well as improving the basic perception of the status of the company in the eyes of French - and other- investors and analysts.

The CAC 40 is actually managed by the New York Stock Exchange-Euronext Indexes committee. That body has two official criteria for inclusion in the CAC 40 index. They are based on free-float adjusted market capitalisation and an averaged volume of share trading in a given company.

Alcatel-Lucent's free-float market capitalisation is €8.2 billion, which puts the company in instantly at Number 30 in the CAC 40. When restored to its former place, Alcatel-Lucent would gain from demand from index trackers to the tune of €255 million euros which equates to two average days of stock trading volume. In other words, once it rejoins the CAC 40 Alcatel-Lucent share value is likely to bounce higher.

Alcatel-Lucent's turnaround has been as spectacular as it has been bloody. The company's restructuring effort (the 'Shift Plan') the brainchild of the new CEO, MIchel Combes, is based on some savage and deep cost cutting. He wants to slash fixed costs by a massive 15 per cent and save a total of €1 billion a year by the end of 2014.

The plan calls for the company to be cash-flow positive by 2015 and the reintroduction to the CAC 40 will certainly help in that regard - as will the sale of some hitherto valued and inviolable assets. However, tens of thousands of rank-and-file jobs will be axed as the company radically slims down to focus on LTE and ultra-fast broadband.

Michel Combes says that the job losses and other cuts are unpleasant but necessary if Alcatel-Lucent is to survive in a world where ultra-competitive Chinese equipment manufacturers continue to to slash the price of their products as they shoulder their way into first world markets.

As things improve, Alcatel-Lucent is also seeking to raise some €2 billion in the form of an injection of fresh capital.

Meanwhile, revenues are growing and losses declining at the company that, when it joined with Lucent in a "marriage of equals' that was anything but, went on to deny its antecedents, history and heritage and spent a lot of marketing money and time trying to convince the world (and the French people) that Alcatel was no longer a "French" company. Few believed that particular line then and fewer still believe it now. The 'partnership' with Lucent was never a wild success. There were too many deep cultural and managerial crevasses to get across. Alcatel now has a second chance and should play to its many (French) strengths.