Alcatel-Lucent CEO Michel Combes will step down from his role on Sept. 1 as the vendor moves toward completing its deal with rival Nokia; the combined company is going to be led by Nokia CEO Rajeev Suri.
Alcatel-Lucent CEO Michel Combes said that there is strong pressure in the industry to have "5G" network products ready as soon as possible.
Alcatel-Lucent CEO Michel Combes will move to French telecom group Altice SA in July, according to a report from French magazine Challenges. The report, which did not cite its sources, said that billionaire Patrick Drahi, who owns Altice, is hiring Combes to take charge of Altice development in Europe starting in September.
Alcatel-Lucent said it is still dealing with lower carrier spending in the U.S. but still managed to boost its overall revenue in the first quarter and improve its gross margins on higher sales of software products.
Nokia's integration of Alcatel-Lucent following the proposed acquisition of its rival will be difficult and messy. Some significant rewards will take many years to achieve, if ever. However, very large research and development demands with economies of scale and scope in 4G, 5G and with fixed-mobile network convergence make this kind of transaction inevitable and indispensable.
Nokia's $16.6 billion deal to acquire Alcatel-Lucent would bring together two large network vendors that have each gone through major mergers of their own that have been difficult, to say the least. Although the companies' leaders are defending the deal, some analysts are skeptical that the firms can pull off such a merger without major integration headaches.
Nokia said it is to buy Alcatel-Lucent in a deal that values the France-based company at €15.6 billion ($16.6 billion) and creates a new European powerhouse in the telecoms equipment market.
Alcatel-Lucent posted higher profit in the fourth quarter of 2014 and vowed to continue its march into profitability in 2015. However, like its larger peer Ericsson, Alcatel-Lucent was stung in the fourth quarter by falling sales in North America, which is especially problematic since Alcatel-Lucent relies heavily on U.S. carriers for its overall sales.
Alcatel-Lucent's Shift Plan restructuring program may have peaked in terms of its effectiveness to deliver cost savings an analyst warned, as the company revealed fourth-quarter and full-year 2014 earnings that were below consensus estimates.
Alcatel-Lucent has set the next stage of CEO Michel Combes' Shift Plan with a focus on diversifying its customer base by selling more of its portfolio of edge and core routers to large enterprises and content providers.