For a man whose company has continued to lose money since he took the helm in 2008, Alcatel-Lucent’s chief executive officer, Ben Verwaayen, is unusually optimistic. However, with sales declining and a weak first quarter of the year, there are numerous questions about what the France-based telecoms company will do to turn itself around. The answer, it appears, lies in emerging markets.

Mr Verwaayen says: “We’re a global company, and we invest in many places. We invest heavily in next-generation products and in research and development. We have spent a lot of effort on the whole green issue, and now technology is expanding and broadband is in the power of your hands.

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“And that’s not just in cities and developed markets – the real battles and investments are happening in the fastest growing markets, which are Africa, rural China and rural India. So that’s where you put your money.” While Mr Verwaayen emphasises that his company’s strategy is not entirely about emerging markets, and he hopes to do better in Europe as well, it certainly appears that Alcatel-Lucent is heading to new frontiers. He jokes that the company is so international that he does not know what ‘foreign’ means, but only recently he announced that it was looking to make a $500m investment to set up a global services hub in India.

Be smart, be fast

When it comes to succeeding in the emerging markets, Mr Verwaayen believes that firms simply have to be smarter and faster than their competitors. In the past, he has complained that companies from emerging markets have an unfair advantage in terms of cost. However, cost is not the customer’s only consideration. He says: “Before you buy something, you very seldom do a study and come to the logical conclusion that this is what you want to buy. No, there is emotion around it, it is about brand value, the way you are treated as a customer and the way the service is done.”

Complacency in Europe

As for his company’s plans in Europe and the current level of FDI across the continent, he is less diplomatic. According to a recent report by auditors Ernst & Young, there is confidence in Europe and 74% of businesses surveyed said that Europe remained an important part of their companies’ future. But Mr Verwaayen is more interested in the 26% that are not confident. He is concerned about what he sees as complacency and an eagerness to blame problems on governments.

Mr Verwaayen says: “It’s good to have an open debate about the choices that have to be made, but it is not just about the governments. [Blaming governments is] the easy way out and is a typical European reaction.

“It’s an excuse for everyone not to move and it’s one of the problems we have. We think the government can solve everything; it can’t. Yes, it needs to put the bar high, but it starts with the whole model. We need to realise that we need to win for coming generations. “We are consuming a lot of the resources that belong to our grandchildren. If we use our resources to invest, that is fine, but we use them for consumption. And that’s wrong.” In his mind, Europe has an abundance of resources and talent, but what is missing is willpower. He wants to see more investment in education and entrepreneurialism.

Staying put

Mr Verwaayen’s own future has been the subject of much speculation, but he says he intends to stay on at Alcatel-Lucent “until the job is done”.

The real battles and investments are happening in the fastest growing markets, which are Africa, rural China and rural India

 For him, that means returning the company to “normalcy” by the end of 2011. He is vague on the specifics of what this means, but the implications are that it entails a more global reach and a return to profitability. Alcatel-Lucent is already present in 130 countries, but Mr Verwaayen believes it is not enough just to be there. He says: “We’re certainly not the winning team in all 130, and I want to win. That’s the theme of this market. Let’s win. And people like our next-generation products. We’re doing the right stuff.”

  COMPANY PROFILE

  ALCATEL-LUCENT

  Headquarters
  Paris

  Total number of employees
  More than 77,000

  Annual revenue
  €15.2bn

 Number of active patents
 27,500

 Chairman
 Philippe Camus

 CEO
 Ben Verwaayen