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Telecom veterans wear new hats with rivals

Lured by stock options and the ability to influence new markets, executives from companies such as AT&T and US West are cropping up at similar, competing communications start-ups.

2 min read
In the communications industry, the acorn doesn't often fall far from the tree.

In the latest example, former Global Crossing chief executive Robert Annunziata, previously an AT&T executive, is expected to join the board of directors next week at PointOne Telecommunications, a privately held, Internet-based communications carrier. PointOne sells wholesale network capacity to prepaid calling card companies and "dial around" firms that offer long-distance services with access codes such as 10-10-321.

Lured by stock options and the ability to influence new markets, executives from companies such as AT&T and US West, among others, are cropping up at similar, competing communications start-ups. Widespread consolidation across the communications industry also has forced out some executives or has been the impetus for many to leave their posts to join the upstart challengers.

Since leaving the top post at Global Crossing around the time Leo Hindery was promoted to CEO, Annunziata has remained active in the communications industry. Global Crossing is a carrier that builds fiber-optic networks worldwide.

In June, Annunziata joined PF.Net, which is building a fiber-optic network, as chairman of the board of directors. In April, he signed on as a member of the board of directors at Log On America, a high-speed digital subscriber line (DSL) provider.

Annunziata's involvement with several communications newcomers underscores both the lack of top talent available for many smaller players and executives' newfound willingness to test the waters. In addition, initial public stock offerings in the optical-networking equipment sector and high-speed Internet access markets remain among the hottest IPOs, luring communications veterans.

"(Board member positions are) a good place from which to watch the industry. If they think they want to get back into the industry, it's a great way to stay in touch and gauge the opportunities," said Lisa Pierce, a communications industry analyst at Giga Information Group. "Usually these people have some degree of financial security already, and they have a vision of what they'd like to do with their careers before they start winding down."

In addition to the attractions of some recent start-ups, the bureaucratic management cultures at larger communications companies like AT&T and US West have led to defections.

For example, AT&T has lost several top executives in recent years, including Annunziata, Hindery, Qwest Communications International chief executive Joe Nacchio and others.

Similarly, the CEOs see Q&A:  Leo Hindery: Spotlight on Global
Crossingof several of the largest competitive DSL providers, such as Covad Communications, Rhythms NetConnections and NorthPoint Communications, all hail from Baby Bell local phone company US West. In another example, former Microsoft chief financial officer Greg Maffei quit Microsoft last year to become CEO at 360networks, another carrier building global fiber-optic networks.

Analysts expect the ongoing rise of new equipment companies and service providers to make top talent all the more scarce.

"It's only going to get harder and harder to find executives," Pierce said. "The price for known talent is going to go through the roof."