Qwest Communications International's chief executive officer,
Joseph Nacchio has resigned and will be replaced by Richard
Notebaert, former president and chief executive officer of Tellabs,
the companies announced yesterday (17 June).
Notebaert had been chief executive officer and president of network
equipment maker Tellabs since 2000 and before that was chairman and
chief executive officer of regional US phone company Ameritech.
Notebaert said he would work on "increasing Qwest's credibility
with Wall Street" and plans to meet with customers to make
relationships stronger.
Working with the US Federal Communications Commission (FCC) is also
a high priority, Notebaert said.
Qwest last week filed an application with the FCC for authority to
provide long-distance phone service in five western US states and
said it plans to file similar applications for the nine other
states where it provides local phone services.
Qwest, like many of its competitors, is beset with financial
problems. Credit rating agencies have downgraded the company's
rating and its accounting practices are being investigated by the
US Securities and Exchange Commission. Qwest is about $26.2bn
(£17.7bn) in debt.
"This management change does not reflect a change in Qwest strategy
or operations," said Frank Popoff, a Qwest board member. "Sale of
non-strategic assets and associated debt reduction is proceeding as
planned."
Nacchio's replacement does not come as a surprise, especially after
the high-profile departure of Bernard Ebbers at WorldCom in late
April, said Maribel Dolinov, a senior telecom analyst with
Forrester Research.
"Service providers are desperately trying to gain credibility in
the financial markets. One way to do that is change top
management," she said, adding that she expects more executives to
leave.
Notebaert's plan to meet with customers is key for Qwest, although
the changes that are needed at Qwest - reduction of debt, staff,
and capital expenditure - are not customer issues, Dolinov
said.
"Most critical for all service providers, in a market where there
is not the demand that they expected, is to maintain the customers
they have. Every customer in the telecom environment is scared and
looking at their options. Do they stay with their provider or do
they change?" she said.
Tellabs chairman Michael Birck will take Notebaert's place as chief
executive officer and president of the company.