Struggling AT&T Shuffles Its Top Ranks

Network bigwig Frank Ianna and sales honcho Ken Sichau head for the hills.
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Mired in the muck of an industrywide slump,

AT&T

(T) - Get Report

acted to lighten its load Wednesday by casting off a couple of executive heavyweights.

The New Jersey phone colossus says it's replacing its top sales chief and its top network operations manager in an effort to "streamline" the organization. The changes come as the telecom industry's ever-present competition threatens to grow even more cutthroat.

Ken Sichau, who led sales efforts at the nation's leading long-distance company, has been replaced by Chris Rooney, who ran government sales. And Frank Ianna, the network architect who was responsible for the company's network, was replaced by his underling, Reed Harrison -- the company's No. 2 network engineer.

The move is a clear sign that the tide continues to ebb in telecom sales despite three years of declines and a few scattered moments of stability, say industry observers and analysts.

AT&T shares fell 36 cents, or 2%, to $14.75 in afternoon trading soon after the announcement.

Free Falling

There have been recent indications that a brief truce in the phone service price war has ended and that a whole new round of fierce bidding has ensued.

According to one person involved in a recent faceoff,

Sprint

(FON)

won a steeply discounted $10 million annual voice-and-data contract with a business customer, despite a competing offer from the newly restructured

WorldCom

that came in 40% below the Sprint bid.

AT&T says the departure of Sichau and Ianna has nothing to do with the company's finances or its sales performance. The move, says a spokeswoman, was aimed at making the company run better.

Boiling Point

Though telecom executives have recently claimed they were seeing signs that the vicious price wars were cooling, it now seems certain that competition will heat up anew. WorldCom, now virtually debt free, will

brief analysts Thursday on its restructuring progress as a warm-up to next week's expected emergence from bankruptcy.

With Baby Bells

SBC

(SBC)

and

Verizon

(VZ) - Get Report

also entering the chase for big-ticket corporate service contracts, AT&T's once-sure hold on the business market is likely to loosen further.

Still, the breadth of AT&T's global reach and service offerings, combined with an expansive and top-flight sales operation, makes it the most formidable player in the field, say fans.

Defending that position in a boggy business climate may be AT&T's defining challenge.