Ben Verwaayen accepts Alcatel Lucent challenge

The former chief of UK incumbent telecom operator BT, Ben Verwaayen, will take the post vacated by Patricia Russo as CEO of struggling Franco-US comms vendor Alcatel Lucent in October. Also announced Tuesday, high ranking French business leader Philippe Camus will replace Serge Tchuruk as the company’s non-executive Chairman.

Verwaayen has an impressive CV. He was formerly vice-chairman of the management board of Lucent Technologies in the US, which he joined in September 1997. Prior to that, he worked with Dutch carrier KPN for nine years as president and managing director of its telecom subsidiary, PTT telecom. Before that, Ben worked for ITT, a predecessor of Alcatel. He finished a six-year tenure at BT in May with quarterly profit after leavers expenses and specific items in at £494m, versus £601m a year ago. Revenues, however, were up two per cent year on year to £5.4bn.

Things are not so rosy at Alcatel Lucent. The firm was formed in late 2006, some five years after it was first mooted. The newly formed entity has done little to dispel the notion that two wrongs will make a right.

By the end of its first reporting period as a merged entity – the final quarter of 2006 – Alcatel Lucent had recorded a loss of Euro618m compared to a profit of Euro381m in the same quarter a year earlier. As a result, the company pledged to cut Euro1.7bn in costs over three years, including at least Euro600m in 2007.

The majority of Alcatel Lucent’s proposed savings were to come courtesy of a massive reduction in headcount. Some 12,500 employees would be shed. In October 2007 the firm announced that the 4,000 headcount job cull would save about Euro400m by the end of 2009. After 6,700 job cuts in 2007, followed by an additional 1,200 jobs shed in the Q108, the total number of employees now stands at 76,200.

Unfortunately, for Russo, the cost savings didn’t help matters much. Alcatel Lucent posted a fifth straight quarterly loss at the end of April 2008. The firm lost Euro181m, compared with a loss of Euro8m a year earlier. Revenues fell to Euro3.86bn from Euro3.88bn a year earlier. For the full year, the firm said it expects revenue to decline two per cent to five per cent due to the weak dollar and lower spending by the carriers.

“I know I’m an optimistic guy, but I feel we have absolutely great assets,” Verwaayen said in a conference call with reporters. “The thing that has struck me most is that there is a very clear path for this company going forward.”

Camus was the Co-CEO at European Aeronautic Defense and Space Company (EADS) and managed a large, global business in the high-tech industry. He is Co-Managing Partner of Lagardere, an international media group, and a partner of Evercore Partners, a New York based investment and advisory firm.

“Philippe Camus and Ben Verwaayen are respected and experienced business leaders. Their understanding of this industry with its challenges and opportunities make them the perfect choice to lead and guide Alcatel Lucent as it moves into this next stage in its development,” said the Alcatel Lucent board in a written statement.