Alcatel-Lucent (NYSE: ALU) on Friday named Michel Combes as the company's new CEO, taking the reins from Ben Verwaayen, who announced earlier this month that he would step down amidst the company's ongoing financial struggles. He will begin on April 1.
Combes (Image source: Vodafone)
A 20-year telecom industry veteran, Combes was previously CEO of Vodafone Europe and has served as both chairman and CEO of TDF and earlier at France Telecom.
"As chief executive he will be responsible for delivering sustainable profitability," said Philippe Camus, chairman of the board of Alcatel-Lucent, in a release announcing Combes' appointment. "His deep knowledge of the industry as well as his experience of major business and financial transformation at a worldwide level will be pivotal in helping the company pursue its aggressive transformation, while meeting customer needs with disruptive innovation."
The company's board of directors also appointed Bell Canada veteran Jean C. Monty as vice chairman of the board.
Combes' appointment comes at a key time in his career. In August, he declined the CEO position at Vivendi's SFR after Vivendi CEO Jean-Bernard Lévy unexpectedly resigned following what a FierceWirelessEurope article said was disagreement with the board about the strategic direction of the company.
However, Combes does face a number of challenges in becoming CEO of Alcatel-Lucent.
For one, he must carry out the cost reduction plan that Verwaayen put in place by cutting 5,000 jobs in addition to €2 billion ($2.63 billion) of financing. He'll also have to weather the storm of a challenging market in which European telcos have cut equipment spending as well as find a way to better position the company to deal with competitive pressure from low-cost Chinese vendors Huawei and ZTE. In addition to being the dominant vendors in their homeland market of China, the two vendors have been making a name for themselves in Europe.
Besides the job cuts, there have been ongoing rumors that Alcatel-Lucent will sell off some of its key assets, including its struggling submarine cable business.
The appointment of Combes comes after another challenging quarter for Alcatel-Lucent. For the third quarter, Alcatel-Lucent reported a net loss of €146 million ($192.3 million)--its second straight quarterly net loss--and revenues of €3.6 billion ($4.7 billion), a 2.8 percent drop from the same quarter last year.
- see the release
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