The CTO of recovering infrastructure vendor Alcatel-Lucent has played down the threat from its Chinese rivals and also labelled NSN a “one-trick pony”.

Speaking to a small group of journalists in London yesterday, Dr Marcus Weldon, CTO of the Franco-US supplier (and recently appointed president of Bell Labs, Alcatel-Lucent’s R&D arm), said he was much less concerned about Huawei and ZTE than he was five years ago. They are constrained in the market, he argued, partly through political obstacles. “That’s why they’re focusing on enterprises and handsets in order to grow,” he commented.

Moreover, they are moving into market areas – such as server blades and devices – in which Alcatel-Lucent does not compete. “We like the fact that Huawei and ZTE compete with each other – and do each other harm – for a constrained slice of the market. We compete in other parts.”

Under its ambitious “Shift” plan to cut costs, re-finance debt, and move more quickly away from legacy products to focus on IP networking and “ultra-broadband access”, Alcatel-Lucent intends to develop a broad portfolio surrounding fixed and wireless networks.

Weldon thinks this strategy puts Alcatel-Lucent in a better position than NSN, another challenged infrastructure supplier, which has chosen to focus on mobile broadband.

While impressed with NSN’s speed in making painful restructuring cuts, Weldon said he would have wielded the scalpel much more sparingly were he in charge: “I think NSN is a one-trick pony in a very tricky market, which is wireless infrastructure.”

The CTO made the argument that wireless investment, particularly outside the US, tends to come in waves. You then have a problem of riding out those waves, he said, if wireless infrastructure is all you’ve got.

Where Weldon sees potential for more interesting and disruptive competition is from IT players moving into the telco space. “I think this will happen,” he said, “but the question is [at]  which layer they make an impact.”

Weldon sees the telco industry moving towards technologies that blend service provider and IT elements, such as NfV and SDN. And clarity of direction is welcome, added Weldon, since it’s more difficult to decide on where to channel innovation efforts without it.

“Until recently, Bell Labs lost its way and identity,” admitted Weldon. “It didn’t know what to innovate on because the parent company and industry were in flux. It became difficult to know who Bell Labs should be.”

Now, said Weldon, Bell Labs has the chance again to do what it’s good at – solving big industry problems. “The reason why there is a brighter future is because the industry knows what it is again – convergence between IT and service provider industries. Bell Labs can have a fair degree of confidence of what it should be innovating towards.”

Weldon has laid down seven domains of innovation he wants Bell Labs to address: network capacity, performance, optimisation, security, devices (the piece that connects to the network as opposed to form factors) and applications.

“If there are any gaps – we haven’t finished the analysis yet – we will make sure we fill them,” said Weldon. “[Bell Labs] is doing interesting things but the alignment of solving big industry problems is not as strong as I would like.”

There are also management structure issues to address. Weldon, conceding that Alcatel-Lucent’s ability to execute on plans and get new products out the door in a timely fashion was “average or below average” in the past, is naturally keen to get rid of intricate management hierarchies that stifle innovation. He questions, too, the efficiency of large R&D teams, running into their thousands, to get things done. (Given Bell Labs has around 700 R&D specialists, Weldon’s views will no doubt be welcomed by Alcatel-Lucent’s bean counters.)

But Weldon is also in the process of hiring. “I would argue we need to rejuvenate some skill sets that we’ve let diminish,” he said, reflecting on the 40 or so people Bell Labs lost to Google about a decade ago. The areas he’s interested in are cloud platform security, web platform innovation and large-scale distributed computer architectures.