The CEO and president of VoIP specialist Avaya, Donald Peterson, has stepped down, and will also relinquish his chairman role at the end of September, the company has announced.

Peterson has been head of Avaya since it was spun off from Lucent in 2000. The company's former marketing manager Louis D'Ambrosio will take over president and CEO.

The shakeup comes as Avaya reported a greatly reduced third-quarter profit. Ending June 30, it reported net income of $44 million compared with $194 million last year. Revenue had however grown 4.9 percent to $1.297 billion from $1.236 billion in 2005.

Avaya is one of the top players in the transformation of telecommunications from a separate network into an application on IP packet networks. It makes phones, servers, software and other products for IP communications as well as traditional telephony. Avaya also has a large services business, which D'Ambrosio once led. The company faces an army of competitors in the IP communications sector, including Cisco, Nortel and even Microsoft.

D'Ambrosio, 42, joined Avaya in 2002 from IBM, where he worked for 16 years in software, sales and marketing, and IBM Global Services. He began his career at AT&T, the monolithic carrier that would eventually spawn Lucent and, in turn, Avaya.

Peterson, 56, was chief financial officer of Lucent when Avaya was formed, and he was named the new company's first president and CEO. In 2002, he added the title of chairman.