Niel Ransom was handed the telecommunications industry’s version of a searing hot potato on Friday — chief technology officer of Alcatel.

The struggling company named Ransom, who is based in Raleigh, as its new CTO for its worldwide operations. And he takes over at a time when Alcatel is shedding workers and searching for new customers.

Ransom has a tough road ahead of him. Chris Nicoll, a networking equipment analyst with Va.-based Current Analysis, says that right now there is not much demand for the type of equipment that Alcatel is producing. And that spending by its core customers, which primarily has been the local telephone and Internet service providers, is not expected to pick up until late to 2002 or early 2003.

“Alcatel has done well in the digital loop carrier and DSL markets,” Nicoll says. “They have the voice capabilities like Nortel and Cisco, but not really on the same level.”

Nicoll points to Alcatel’s May 2000 acquisition of NewBridge Networks, a developer of broadband technologies, as the cornerstone for its expansion in the North American metro networking market. And possibly the catalyst for Ransom to succeed.

“What he needs to do is lay out a new vision for Alcatel — and that will be difficult to do,” Nicoll says. “Where years ago AT&T was the only real carrier and customer to sell to, now there are many. His challenge is going to be to take the company’s vast resources and discover how to best meet the needs of all those carriers.”

Competitors struggling as well

Nicoll says that although there demand is lagging for Alcatel, “none of the networking equipment manufacturers are really lighting a fire.”

“But they have a great opportunity to get in, focus and lay out a vision without falling behind,” Nicoll says.

Ransom was the CTO for Alcatel USA, where he was in charge of corporate research, technology strategy and network product planning. Ransom joined Alcatel in 1997 as vice president and general manager of the Paris-based company’s local networks business unit, a product group that encompassed DSL, lightwave access and crossconnect products.

Ransom is replacing outgoing CTO Martin De Prycker, who has been with the networking equipment manufacturer since 1982. A company spokesman says that Alcatel has not determined if Ransom will remain in Raleigh.

The road to recovery?

Since the telecommunications crash of 2001, Alcatel, like its competitors Nortel Networks and Cisco Systems, has been forced to consolidate its manufacturing operations. Alcatel is in the process of cutting back its global workforce from 113,000 at the end of 2000 to 73,000 sometime this year.

Earlier this week, Alcatel laid off approximately 140 workers from its facility on Wake Forest Road. Although the company declined to provide the exact number of local workers who were cut, several published reports indicate that 140 is at least in the ballpark. Alcatel declined to say whether more workers would be laid off from its Raleigh campus in the coming months.

Alcatel has cut about 900 workers from its local facility since last summer. At its peak the company employed about 1,750 workers in the Triangle. About half of those employees worked in three shifts around the clock in its manufacturing plant in Raleigh. That plant has since been shut down and now a majority of its local employees are in sales and marketing.

But there is a small research and development team here that works on “fiber to the home,” a new technology the company is developing that will enable home consumers to receive high-speed data services over fiber-optic lines. Currently, similar technology is primarily available only to businesses, and Internet service providers.