CEO Patricia Russo and Chairman Serge Tchuruk will leave Alcatel- Lucent, the company said as it announced a large Q2 loss. Analysts saw revenue declines for the company's core CDMA products as the main reason for persistent losses. Russo said she will leave by year-end. Tchuruk said he will leave Oct. 1. The company hasn't earned a profit since the 2006 merger of Alcatel and Lucent that they engineered. It's time for the company to "acquire a personality of its own, independent from its two predecessors," Tchuruk said. The company's net loss in the second quarter grew to $1.7 billion, up 88 percent from a year earlier. Revenue dropped 5.2 percent. The company reiterated its April forecast that 2008 sales will fall 2 to 5 percent because of the dollar's drop against the euro and possible spending delays by customers. Russo said she sees signs of the global economic slowdown spreading to Europe. nnNetworks based on Alcatel-Lucent's CDMA are losing ground globally to GSM and other standards, said Allen Nogee, principal analyst at In-Stat. A leader in the CDMA market, the company relied too much on the technology, he said, and most CDMA operators already have completed upgrades to the latest standard, CDMA20001XEV-DO Rev. A. With Rev. B still in progress, no new hardware is required, erasing revenue sources, he said. And many CDMA operators are switching to Long Term Evolution. Alcatel- Lucent will play a part in the LTE business, but it will take years before LTE revenue can make up for CDMA declines, he said. Russo and Tchuruk "definitely should have pushed" the company more quickly toward WCDMA/HSPA, he said. The shake-up is just a start, and the next few years will be difficult for the new management, he said.
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