| Telus intent on weighing other options, CEO says | |
The Edmonton Journal, 5/04/98Telus Corp. president and chief executive officer George Petty is not one to mince words.
"We will not be roadkill on the information highway," he vowed at this week's annual meeting.
Not surprisingly, those words brought smiles to the faces of greedy shareholders eagerly awaiting news of what the future might hold for their beloved company.
But in an industry where an organization's status quo can change, or be changed by its competitors literally overnight, it will take more than a few succinct words and a reputation for hard-nosed leadership to guarantee ongoing financial success.
Telus's recent failure to complete a working arrangement with long distance carrier AT&T Canada has sparked questions and speculation about the Edmonton-based telecommunications company's future - a future that is now uncertain in spite of the eye-popping financial results that have been recorded since Petty's arrival in Edmonton in 1994.
Ironically, Petty and Telus may be the victim of their own success.
Since the former U.S. Air Force officer and engineer took over the helm at Telus, annual revenues have marched forward from $1.3 billion to $2 billion in 1997, cash flow has advanced from $522 million to $785 million, and the company's shares have jumped from $15.88 to more than $40 in 1998.
Those gains have fuelled the imaginations of Telus executives and decision-makers who have taken their cue from Petty's strident stewardship.
"He comes from a company (AT&T) that is known for playing hardball," says Ian Angus, president of the Angus Telemanagement Group.
As a result, during Petty's tenure Telus has become increasingly voluble and dissatisfied with its role in the Stentor alliance, the loose amalgamation of Canadian telecommunications companies dominated by industry leader Bell Canada.
That chafing culminated in a secretive overture to AT&T Canada that, when it was made public at the behest of market regulatory agencies, ruptured the gentlemen's agreement that had enabled the Stentor companies to work co-operatively towards a variety of common goals.
"What has happened as a result of the Telus initiative with AT&T," says Angus, "is that Petty and Telus have created a situation where they have annoyed their friends and business partners and now all bets are off when it comes to the ongoing viability of Stentor."
"They could easily end up in a scenario that is considerably less desirable," adds Angus. "On the surface, it would seem they have a lot of options, but if you take a close look, how many are really desirable?"
Others are less charitable. They say Petty's failure to close the AT&T deal has not only poisoned the company's relationships with other Stentor partners - especially Bell, which unveiled retaliatory plans to go after Telus's corporate customers within days of learning of the proposed Telus-AT&T alliance - but has put Telus at tremendous risk.
"If he (Petty) doesn't have a Plan B, then shareholders and the board of directors should be very concerned," said a Toronto analyst who asked not to be named because of the volatile, emotion-charged atmosphere that characterizes the telecommunications industry.
"He's left them blowing in the wind."
At this point, Petty appears to not only have a Plan B, but also a Plan C and a Plan D. What remains to be seen, however, is whether any of those plans are viable or merely fodder for the corporate rumour mill.
Petty told shareholders Telus is actively looking to align itself with other players in the rapidly exploding telecommunications world and that at least one new business association is likely within the next two years.
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