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Betsy Does a Bunk From AT&T

AT&T Corp. (NYSE: T) president and head of consumer operations Betsy Bernard resigned Tuesday, setting off negative chatter among analysts who track the company on Wall Street (see AT&T President Resigns).

”Managing a business with declining revenues and undergoing consequent downsizing is presumably not as enjoyable as some other alternatives Bernard might be pursuing,” quipped Adam Quinton, analyst with Merrill Lynch & Co. Inc., in a note to investors.

Bernard was due to give the keynote speech at the FT World Telecommunications Conference in London yesterday, but pulled out at the last minute. She was replaced by William Archer, AT&T's newly appointed president for Europe.

AT&T and other long-distance carriers are struggling with weak demand, price wars, and a customer shift toward wireless and cable operators. In the third quarter, AT&T's sales to residential customers fell 15.8 percent (see AT&T's Q3 a Real Puzzler).

Bernard, 48, was an 18-year veteran of AT&T, returning to the company in March 2001 as CEO of AT&T’s consumer operations after stints elsewhere as CEO of Avirnex Communications and executive VP of retail markets at U.S. West/Qwest Communications International Inc. (NYSE: Q) (see AT&T Names President-Elect).

Her role at AT&T explicitly involved preparing the company to IPO as a tracking stock. Those plans were subsequently shelved. In October 2001, she was made president-elect of AT&T.

Analysts say that given the original reasons Bernard had for rejoining AT&T, one personal goal may well be to secure a role as CEO of a quoted company.

Reading between the lines of Bernard’s official statement, this sounds feasible: "I look forward to finding the right leadership opportunity in the next phase of my career," she said.

Bernard will be replaced by William J. Hannigan, 44, a seasoned telecom executive and old buddy of AT&T CEO Dave Dorman. Hannigan was most recently chairman and CEO of travel firm Sabre Holdings.

Prior to becoming CEO of Sabre, Hannigan spent 16 years in the telecom services industry, most recently at SBC Communications Inc. (NYSE: SBC), and before that at Pacific Bell Internet Services. His longest stint was at Sprint Corp. (NYSE: FON). Interestingly, he worked with Dave Dorman at all three of these companies, so they clearly already know each other.

"Dorman has decided to bring in a senior executive with greater experience in the business services arena – clearly the future of AT&T, given the dramatic rate of contraction of its consumer revenues," continued the note from Merrill Lynch's Quinton. AT&T's consumer revenues have fallen 20 percent year-over-year over the 2000-2003 period.

Shares of AT&T slipped 0.29 percent to $20.29 in early afternoon trading on the Nasdaq.

— Jo Maitland, Senior Editor, Boardwatch

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BobbyMax 12/4/2012 | 11:12:35 PM
re: Betsy Does a Bunk From AT&T Mr. Dornan, Chairman of AT&T himself is not very good in governance and business aspects of AT&T. He has become so far removed frpm AT&T that is time for him to be pushed out. The AT&T Board will never take any action as they derive tremendous monetary benefits from AT&T. Thanks to the corrupt system. Mr. Armstrong did tremendous disservice by fragmenting AT&T beyond recognition. Every fragment unit is openly failig ( AT&T, Lucent, Avaya, Telcordia, Agere). The demise of Lucent is now eminent. Nothing is coming out from Lucent and AT&T.

AT&T still maintains a workforce of over 70,000 personnel. It does not need these many personnel. It has AT&T Labs which is not capable of doing anything but is maintained nonetheless. Where is AT&T going? Mr, Dornan does not know what the people are saing about hom and his performance.

It is not clear to me why Betsy was hired. It is not clear to me if she had any experience that was of use to AT&T. Working in RBOCs is no experience as thgey are doing anything that requires any skill.
SIVROCX 12/4/2012 | 11:12:34 PM
re: Betsy Does a Bunk From AT&T BM, the last time I checked Telcordia is owned by SAIC and doing quite well I might add. +£
technonerd 12/4/2012 | 11:12:33 PM
re: Betsy Does a Bunk From AT&T AT&T still maintains a workforce of over 70,000 personnel. It does not need these many personnel. It has AT&T Labs which is not capable of doing anything but is maintained nonetheless. Where is AT&T going? Mr, Dornan does not know what the people are saing about hom and his performance.
Sad but true. I wonder what percentage of their revenues come from consumer long-distance. This business will vanish as a consequence of the imminent cannibalization of residential wireline voice by cellular carriers that include LD in their bundles.
rabbitrun 12/4/2012 | 11:12:32 PM
re: Betsy Does a Bunk From AT&T BM:

A few corrections to your posting:

Telcordia (formally Bellcore) was spun off from the Bell System in 1984. I doubt even the most cynical of us can blame TelcordiaGÇÖs demise (i.e. being acquired by SAIC) on BetsyGÇÖs performance in 2003.
Betsy held the position of President of SBC-Long Distance while at that RBOC you so openly despise. I think this experience could be applied to AT&T-LD. DonGÇÖt you? That division of SBC now has a market share of 30-40% in CaliforniaGÇÖs and TexasGÇÖs consumer LD phone service. Pretty good for a stupid RBOC donGÇÖt you think?
What exactly do you mean that AT&T Labs is a do nothing group? They were awarded 206 patents in 2002, and created the best IP-VPN service in the industry http://www.lightreading.com/do.... How many patents were you awarded this past year? Can I therefore claim you are a do nothing entity?
thiggins 12/4/2012 | 11:12:32 PM
re: Betsy Does a Bunk From AT&T An interesting perspective on the announcement.

AT&T Leadership Crisis Ver3.5
<http: comments.php?id="1868_0_5_0_C" www.alwayson-network.com=""></http:>
technonerd 12/4/2012 | 11:12:31 PM
re: Betsy Does a Bunk From AT&T Betsy held the position of President of SBC-Long Distance while at that RBOC you so openly despise. I think this experience could be applied to AT&T-LD. DonGÇÖt you? That division of SBC now has a market share of 30-40% in CaliforniaGÇÖs and TexasGÇÖs consumer LD phone service. Pretty good for a stupid RBOC donGÇÖt you think?

I'm not impressed at all. Look, something like 15% of the people move each year, it's got to be higher in TX and CA. I'm sure SBC got that share literally by default. Not even an RBOC is blockheaded enough to avoid getting a big LD share once they're allowed into the business.
st0 12/4/2012 | 11:12:26 PM
re: Betsy Does a Bunk From AT&T The best person to run ATT, may be sound strange, Armstrong. With good knowledge of the ATT past, without the Globalcrossing and WCOM on the market, this time he should be able to perform to his best (fair competition). You would need an insider to fix the company fast. It is not having that much of time to be wasted (or bring some old timer ATT retiree to fix it fast). Bring in another outsider and wait until he familiar with the situation and act upon according to the advice of "street", a really scary situation to bring down the Bell founded great company. Gov should start to rescue ATT, since they gave so much to Global Crossing, MCI-WCOM after 96. It is just fair to save the "good compnay" while it still standing....

-st
materialgirl 12/4/2012 | 11:12:24 PM
re: Betsy Does a Bunk From AT&T Get over it. The telecom industry as we know it is dead. People will get hurt. Ultimately, this is called "progress", as only after this is out of the way can we get on to doing business in a more productive manner. There is no one you can bring in to save this.
fw23 12/4/2012 | 11:12:22 PM
re: Betsy Does a Bunk From AT&T >Get over it. The telecom industry as we know it >is dead. People will get hurt. Ultimately, this >is called "progress", as only after this is out >of the way can we get on to doing business in a >more productive manner. There is no one you can >bring in to save this.

I totally agree. Its time for the dinosaurs of
this industry to fall over and die. You can't
make money off legacy electronic networks anymore.

The only solution is to use the remaining assets
of these legacy companies to build modern
networks. The best way to do this would be to
create and fund modern network subsidiaries
out of the pockets of the legacy electronic
service providers. And then let the verizons
and SBCs of the world die.

The future of communications is LIGHT. We have
to start scrapping all that old electronics
equipment and move to LIGHT-based networks.

Rather than asking /whats the cost/, people
need to ask /whats the opportunity/. And
where I'm sitting the opportunity is LARGE.

LIGHT based communications means nearly ALL of the
existing networks and devices will have to be
replaced soon. A vendor that can deliver a
GLOBAL solution based on LIGHT is looking at
tens of BILLIONS in business (and thats a
low estimate).

And the OWNER of a LIGHT based network is looking
at survival rather than death.

Its so simple. Sure, all the doubters and the
nay-sayers in the peanut gallery will be all over
me for telling the TRUTH, but it needs to be
said.

fw23 12/4/2012 | 11:12:07 PM
re: Betsy Does a Bunk From AT&T >It is really scary for the sentiment like this. >Telecommunication is national sercurity issue, >not just another commercial company. (remember,
>when the blackout occur, the only one functional
>is the Bell old wireline). Are you suggesting
>get over it with Huawei take it over? Sure
>progress to low cost and more "productive
>manner" from greed point of view. Save your life
>line while you still can....

National Security is about protecting the
army and the government. It has nothing to do
with the ability of people to chatter with their
friends during natural disasters like the
blackout. Besides which, if the government
deregulated electricity and encouraged
micro-power, there would never have been a
blackout in the first place.

In the post-9/11 world, people have to learn
to take care of their own problems. The
government can't nursemaid people every time
the lights go out anymore. The government is
too busy fighting the bigger fight on the
central war front in Iraq to spend time or money
to help people who should be helping themselves.

Besides, competition is the best problem solver
in the world.
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