Ben Verwaayen, the new chief executive of Alcatel-Lucent, is gambling on an acceleration of investment in next-generation technology and a €750m ($1bn) cost-cutting plan to restore the struggling telecoms equipment manufacturer to health.

However, he warned Friday that the telecoms equipment market would decline sharply next year, by between 8 and 12 per cent, and the group would reach break-even at operating level only in 2009.