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During its second- quarter earnings call earlier this morning, telco gear maker Alcatel-Lucent said its chairman, Serge Tchuruk, and its CEO, Patricia Russo, would step down. Both said they were stepping down because consolidation after the 2006 merger was complete, and now the company needed someone to take it in a new direction. Russo will leave at the end of the year or sooner if the board finds a replacement, and Tchuruk will leave Oct. 1. Russo especially had faced demands for her departure as the newly combined company lagged.

Demand is falling for Alcatel-Lucent equipment, while its carrier customers contemplate the slow migration to 4G technologies such as LTE and WiMAX. The next-generation networks are coming but are still several quarters out,with LTE networks coming online in 2010 and full deployment closer to 2012. WiMAX is growing now, but it’s a smaller market. Another wrinkle is that some carriers such as Vodafone in the UK are content with their 3.5G networks and don’t plan to move to LTE for even longer.

Given its main customers’ plans around network build-outs, plus the lackluster economic environment, Alcatel-Lucent has been seeking alternatives to telco networking gear, including outfitting electric utilities with smart-grid equipment. It’s a shame that the Alcatel-Lucent deal is faring so poorly, because more consolidation is still needed in this sector.

Just when the average consumer was learning to take advantage of the 3G network (while perhaps noticing the limits of the 2.5G Edge network on the iPhone), it’s time to prep for 4G. Verizon and Vodafone are already testing 4G equipment that relies on the Long-Term Evolution standard.

Arun Bhikshesvaran, VP of business strategy and CTO for Ericsson North America, said the equipment maker has launched a trial of its LTE baseband equipment with an unnamed carrier. He expects it will be completed toward the end of the year.

He expects 2008 and 2009 to be the trial and test years for the standard and anticipates 2012 will see widespread deployment. Bhikshesvaran further expects the U.S. and Japanese markets to lead the way, with Europe to follow. Although China Mobile announced an LTE test at Mobile World Congress last week, Bhikshesvaran is uncertain if the Chinese market will skip 3G deployment entirely. India chose not to.

The staggered generations of network will only help Ericsson, which faces a smaller end-user market in the U.S. thanks to carrier consolidation and new competitors from the Chinese. The company’s finances have suffered while waiting for the injection of capital spending that a network upgrade cycle brings, although Bhikshesvaran downplayed the affects of stagnant U.S. growth on the company. “We’ve sold more GSM base stations in the last year than we did in the first three,” he noted.

When it comes to competition, Bhikshesvaran said Ericsson has an advantage from having already spent a lot of time and effort working with the standards boards, but acknowledges that formidable competitors could arise in China.

“We can’t underestimate the skill of the Chinese vendors, and to use the American car industry as an example, we could see something like a Toyota or a Honda arise,” Bhikshesvaran said. “The challenge is how do we want to play in that market? We aren’t sure if we want to be a BMW or a Mercedes-Benz, but not something like Chrysler.”

Bhikshesvaran didn’t give details about how Ericsson would avoid the fate besetting American auto companies, but he said the company would be prudent in the Chinese market. As for the rest of the competition, Bhikshesvaran expects Ericsson’s global customer base to offset a slowdown of 3G equipment sales in many markets and the lag between testing and the sale of 4G equipment.

In addition to the network transitions, Bhikshesvaran is pushing for more data traffic on the cellular network — from navigation devices to multimedia downloads — to drive revenue in saturated markets such as the U.S. However, driving more traffic to data networks might require the carriers to give a little on price, as well as to offer compelling services and content on a mobile handset. I’m not sure that by 2012 they’ll have it right.

Vodafone is adding Spain and Italy to a growing list of countries where it will be offering triple play services. London-based mobile services provider has acquired Spanish and Italian-assets of Tele2 for about $1.1 billion in cash, reports The Wall Street Journal.

It beat out competitors Tiscali and Fastweb in the bid for Tele2 assets. It already offers broadband service in UK, Portugal, Germany and Greece. Triple-play is part of CEO Arun Sarin’s Mobile Plus strategy that is necessary for the company to boost its revenues.

“What is clear to us is that mobility and broadband are the two core things that our company needs to participate in, ” Sarin said at a recent investor conference. (PDF Transcript.) “DSL is a local, country-by-country strategy. There is no one strategy for Europe, simply because the industry structure is very different, the regulatory structures are very different.”

The company is also looking at WiFi and Mesh WiFi as options as well, depending on locations, but one thing is clear - if Sarin continues on the current path of acquisitions, then Vodafone might emerge as a pan-European broadband supplier.