Alcatel-Lucent on Tuesday said it appointed former BT head Ben Verwaayen as its new CEO and Phillipe Camus, an executive with New York-based business advisory firm Evercore Partners, as its non-executive Chairman.
Mr. Verwaayen and Mr. Camus will replace Pat Russo and Serge Tchuruk, who one month ago said they would step down after the French telecommunications company posted six consecutive losing quarters amid customer budget cuts and stiff competition from rivals such as Ericsson and Huawei. (see Chairman and CEO to Exit Alcatel-Lucent)
In Mr. Verwaayen, a Dutch national, Alcatel-Lucent gets a chief executive who held top positions at BT, Dutch carrier KPN, and at Lucent back in the go-go nineties when that company was spun-off from AT&T. (see BT Group CEO to Step Down)
“He is a proven veteran who while he was at KPN was involved in the first purchases of Lucent's equipment when Lucent moved into the European market. So he has a long track record as both a buyer and seller of telecom equipment,” said Joe Nordgaard, director of wireless consulting firm Spectral Advantage.
Mr. Verwaayen took over as CEO of BT in 2002, when the economic and regulatory environment was forcing BT to change from a slow-footed, mostly land-locked British monopoly into a 21st century company with global capabilities.
But his challenges at Alcatel-Lucent will be different from those at both Lucent and BT.
Alcatel-Lucent with its combined size and reputation was expected to prosper in a climate where carriers invariably reward size, stability, and reputation.
That has not happened in part because of Alcatel-Lucent's extensive legacy market and operation. That legacy includes its large manufacturing base, staff, and distribution base that the company is still trying to sort out, according to analyst Moe Tanabian of IBB Consulting.
“Ericsson can focus on Europe and Huawei can focus to a large extent on China and other fast growing markets, Alcatel-Lucent has a large legacy fixed-line business in slower-moving parts of the developing world,” Mr. Tanabian said.
Still, there are opportunities in the legacy fixed-line business because carriers are replacing twisted pair wires with fiber-optics to the home, according to Mr. Nordgaard.
“The industry is going through a number of major transitions so there is room for innovation in both wireline and wireless,” said. “But with fewer carrier-customers, the market has gotten more competitive.”