Q: How is Time Warner Telecom threatened by the upcoming megamergers in the telecom industry?
A: When AT&T gets absorbed into SBC and MCI gets absorbed into Verizon, the two largest competitive players with fiber networks will be gone. We are the next largest in the country. There will be nobody left with as many buildings connected with fiber.
The belief is that bigger is better. I don’t know if that’s true. Customers have been telling me they worry about the consolidation. We need a strong third competitor.
We’ve also been competing against these big companies for years successfully. So now they’re just bigger. Are you going to take a bunch of bureaucratic companies and slam them together and make them less bureaucratic?
If we can be less bureaucratic and move quickly and bring the new products faster, the customers will turn to us.
What’s going to happen with all this consolidation is you’re going to see a lot of people distracted. When people are worried about their jobs, are they focusing on the customer? Are they focusing on moving technology forward? I don’t think so.
Q: Your entire career was spent in sales with various telecom companies. How did that qualify you to be CEO?
A: As the CEO, you are selling your vision to employees. You don’t just get on a conference call a couple times a year or send out a few e-mails. You’ve got to talk to employees and convince them that your vision is the right vision because you want them to follow you.
One of the things I believe is important is connecting with people individually. Every six weeks, I have a breakfast meeting with just five employees randomly chosen from the organization, and I ask them two questions. First: What do you like about the company? Second: If you could improve one thing in this company, what would it be?
I have to be listening to what they see is happening. I think a lot of CEOs over the years have lost sight of that. We’ve changed policies at the company based on those breakfasts.
A big portion of my job is also building relationships with the customers. I’m very approachable, and I want to hear what they have to say. We have to make sure that our business is evolving to be able to support those customers better than anyone else in the industry, because at the end of the day we think we have a superior network.
Q: Were you surprised when you were asked to become CEO in 1998?
A: I was asked to be CEO on my 40th birthday. My office had been decorated by my employees. Someone had also rented a duck, which was quacking around my office. It turns out my secretary’s birthday was the same day, so I was going to be taking her out to lunch. When I went out to the parking lot, there was a donkey with a saddle on it. All the employees were clapping and waving me on to ride this donkey around the parking lot with the duck in my hands.
So in the midst of all this, the chairman calls me and offers me the job of CEO. I told him: “You need to understand this is a rather surreal day. This is my 40th birthday, there is a live duck in the office and you are offering me the job of CEO.”
At the time, I was not sure that I was the right person for the job. Most of the jobs I have taken I have had doubts about, because I have taken such big jumps.
Three weeks later I had to raise $400 million. I had no experience in the capital markets, but I knew how to sell. Even for the times, it was an extremely successful debt deal. We have raised, between refinancings, probably $4 billion.
Q: Why has Time Warner Telecom’s stock all but doubled in the past few months?
A: Well, it’s a lot of things. First of all, I think the market has realized we’ve had two good quarters of top-line revenue growth. I think we’re also doing a better job helping the marketplace understand our fundamental trends. Our data and Internet have grown almost 33 percent year-over-year; enterprise revenue has grown 18 percent. Nobody has double-digit growth in this area right now. We’ve also done a better job explaining how we’re spending our capital. We’re not just blowing it.
Edited for space and clarity from an interview by staff writer Ross Wehner.
