The Wall Street Journal reported Monday (Sept. 1) the Paris-based company has chosen Ben Verwaayen, a former head of British Telecom Group PLC, to replace Patricia Russo as CEO. Philippe Camus, previously head of EADS was also reportedly picked to serve as chairman of the company, replacing Sergey Tchuruk who steps down from the position on Oct. 1.

The Journal said a formal announcement about the appointments could come as soon as Tuesday (Sept. 2.)

Alcatel-Lucent was formed after French telecom equipment vendor Alcatel SA acquired New Jersey-based Lucent Technologies Inc. in November 2006 partly in response to growing competition from low-cost vendors in Asia and also due to ongoing consolidation in the industry.

The merger hasn't worked out quite as expected and the partnership of Russo in the CEO position and Tchuruk, the chairman, has been problematic, according to observers who said the company struggled with integration issues as cultural differences sparked intense rivalry between the North American entity and the European organization. Additionally, Alcatel Lucent has faced difficulties as the telecommunications equipment industry continued to weaken.

Its margins have suffered as a result and the company has had to take additional steps to reduce costs, resulting in a pile of charges related to the reorganization.

The restructuring led to a loss in the June quarter but the company was also dealing with other operating problems related to high costs, according to Standard & Poor's analyst Patrice Cochelin.

"Alcatel Lucent's operating margin before restructuring, write downs, purchase price accounting entries, and other one-time items was weak, at 2 percent in second-quarter 2008, resulting in a margin of about 3 percent over the past 12 months," said Cochelin in a report. "Only modest year-over-year improvements can be expected over the next few quarters."

The new executives will have their hands full repositioning Alcatel Lucent as a leader in its field even as they complete the ongoing reorganization of the company and the integration of the businesses brought together in the merger almost two years ago.

Verwaayen is not new to Lucent or the telecommunications industry. He served as vice chairman of Lucent's management board until being appointed CEO of British Telecom in 2002. He resigned from BT in June.

Camus was CEO of European Aeronautic Defense and Space Company, the parent company of Aircraft manufacturer Airbus. He is also a senior managing director with investment firm Evercore Partners.