Alcatel-Lucent appoints former Vodafone exec Michel Combes as CEO

Combes will now have to lead an effort to decide what kind of vendor Alcatel-Lucent wants to be, according to analysts

Alcatel-Lucent's board has appointed Michel Combes as the company's new Chief Executive Officer, following Ben Verwaayen's recent resignation.

It only took the Alcatel-Lucent's board two weeks to appoint new CEO after Verwaayen's plan to step down became public earlier this month. Combes will take over on April 1, and will also join the company's Board of Directors, if shareholders approve at the company's annual general meeting on May 7.

Combes served as head of Vodafone Europe, where he was also a board member, and has worked at France Télécom.

His departure from Vodafone was announced in May last year, when it was revealed he planned to take over as CEO of French operator SFR -- but the move never materialized. SFR put out a statement in May announcing the appointment, but this was followed by a new statement a few months later confirming a different CEO following a management shake-up.

Getting a CEO that knows how operators think could be good for the struggling network equipment vendor.

"The idea of bringing on board an operator executive has some good rationale behind it," said Mark Newman, chief research officer at Informa Telecoms & Media.

The news of Verwaayen stepping down came as Alcatel-Lucent reported a fourth-quarter net loss of ¬1.37 billion (US$1.81 billion) at the end of a challenging year that saw the company swing from a profit during 2011 to a loss.

The company was taken off guard by the rapid move from CDMA to LTE in North America, a weakening GSM market in China, and the economic situation in Europe, Chief Financial Officer Paul Tufano said during the conference call presenting the results.

Combes will now have to lead an effort to decide what kind of vendor Alcatel-Lucent wants to be, and find a clearer direction for the future, according to analysts.

So far, the company hasn't gone through the same restructuring effort that competitor Nokia Siemens Networks has. It shed a number of units and laid off thousands of employees, according to Sylvain Fabre, research director at Gartner.

"The question is what the company's is strategy and how is it going to get there. Alcatel-Lucent is still at the point where it needs to formulate what the hard decisions it needs to make are, and then execute aggressively on that," Fabre said.

Newman agrees: "It is interesting to see that Nokia Siemens, even though it is still early days, seems to have had a gentle recovery by streamlining and simplifying its business," he said.

Alcatel-Lucent has said it is now planning to sell some of its units in the next 18 to 24 months. Combes' knowledge of the industry as well as his experience of business and financial transformation will be pivotal in helping the company pursue an aggressive transformation, it said in a statement.

Part of the restructuring work should also focus on making its wireless business more competitive. It remains the key challenge facing Alcatel-Lucent, and the company has made no secret of the fact that it wants to be a leader in LTE, according to Newman. The company lost market share in the radio access network sector in 2012, and remains the fourth largest vendor behind Ericsson, Huawei Technologies and Nokia Siemens, ABI Research said on Thursday.

Combes, a Frenchman, will also have to address continuing tensions between the French and American parts of the organization and help energize its employees, including those based in other parts of the world, according to Fabre. However, if Alcatel-Lucent's problems escalated to the point where the French government had to step in to avoid a fate like Nortel's, his nationality could help, Fabre said.

Recently there have been rumors about a potential deal between Nokia Siemens and Alcatel-Lucent, which would see Siemens exit its joint venture with Nokia. However, if that deal went through, the big winners would be Ericsson and Huawei, according to Newman. On paper, consolidation makes sense, but in reality it is hard to see how it could be successful, he said.

"The cultural challenge of bringing together a U.S.-French organization with a Finnish-German organization will, in my mind, be a massive headache," Newman said.

Send news tips and comments to mikael_ricknas@idg.com

Join the PC World newsletter!

Error: Please check your email address.

Tags business issuespersonneltelecommunicationalcatel-lucent

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Mikael Ricknäs

IDG News Service
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?