Wholesale world 2012: Top 20 influential telecoms people 2012
16 January 2012 | Richard Irving
Who are the top 20 most influential people in wholesale telecoms this year? We asked you to nominate the executives most likely to prosper in the coming months – and the results are in. Richard Irving reports.
The telecoms sector faces its most challenging period for a decade. Prices are tumbling, margins are eroding and competitive pressures are mounting And that’s the good news: Recessionary clouds are gathering, political boundaries are in a nervous state of flux and the financial markets are facing another liquidity crisis.
Yet demand for bandwidth connectivity continues to grow at an extraordinary rate and the spirit of innovation that has spurred the industry to such phenomenal success is every bit as much alive today as it was in the back yards of Silicon Valley’s early technology trail blazers.
There is no doubt that the stakes are getting higher – whether it be in the race to the cloud, the dash for spectrum, or even the surge in M&A. But if there’s one thing that can be said of our poll winners, who represent a broad array of telecoms specialists from inventors to salesmen and mathematicians to entrepreneurs, it is that they all boast a truly incredible depth of experience that sees them well placed to weather the uncertainties of the coming year.
Between them, they have generated a staggering $1.5 trillion in stock market value (enough to bail out Greece five times over); they have served their industry for, on average, the best part of two and a half decades; and they have rewarded both their initial backers, and more recently their stockholders, with substantial profits. These are men and women who have lived through the dark days of the telecoms crash and have emerged wiser and more financially disciplined as a result. Such expertise will undoubtedly prove invaluable in the coming months. Here then, are Capacity’s 20 most important people to watch in 2012.
Ren Zhengfei, founder and chairman, Huawei Technologies
A former officer in the People’s Liberation Army, Ren Zhengfei has built the Shenzhenbased telecoms equipment maker into one of China’s biggest privately-held companies and a global powerhouse. Ren counts 36 of the world’s top 50 telcos among his customers and sells to more than 100 countries in all. An aggressive defender of his company’s intellectual property rights, Ren’s 17-strong family of research and development centres file more patents each year than all but one other global company. Born into a poor family of farmers, Ren taught himself English and then went on to study digital technology before marrying into the Sichuan political hierarchy and setting up Huawei in 1988. Reportedly mistrustful of outsiders, the 67-year old has handed out senior executive positions to his daughter, his son, his son-in-law, his younger brother and three sisters.
While Ren will undoubtedly view succession planning as a major priority for 2012, far more pressing is his need to break into the US, where security concerns continue to dog his efforts to sign big-ticket deals.
Vittorio Colao, chief executive, Vodafone
Now entering his fourth year as head of Europe’s biggest telecoms group, the 50-year old Italian chief executive is slowly divesting those strategic stakes that have proved increasingly tricky to manage and reinvesting the proceeds in higher margin businesses such as data services.
Colao, a keen cyclist who served in the Italian police force in his prime, won plaudits after selling his 44% stake in SFR, the French mobile operator for nearly £7 billion. Assuming the former McKinsey partner establishes a good rapport with Gerard Kleisterlee, Vodafone’s new chairman, more disposals will follow.
That puts the spotlight squarely on Vodafone’s immensely profitable but hugely controversial 45% stake in Verizon Wireless: Is there an appetite on the Vodafone board for one last blockbuster merger?
Glen Post, chief executive, CenturyLink
This year, Post celebrates his twentieth year as chief executive, one of the longest serving chiefs of any telecoms company in the world: Glen Post is CenturyLink. During his tenure, revenues have grown from $360 million to more than $18 billion and CenturyLink is now America’s third largest telecoms company.
Though publicity shy, Post is a consummate dealmaker who gets involved in every aspect of a merger, from financing right through to root-and-branch integration. An ace duck hunter, he is passionate to the point of evangelical about the cloud and observers will be watching with interest to see what he does with Savvis this year, especially given the very high price he paid for the data centre provider last spring.
Tim Cook, chief executive, Apple
How to replace the irreplaceable? The heir apparent since becoming chief operating officer in 2007, Tim Cook probably has a three to five year-supply of bandwidth-hungry devices in the pipeline and an excellent record in bringing them to market.
Having conquered the 400-million a year smartphone market, Cook, the architect of Apple’s legendary supply chain, is aiming for world domination of the entire 1.5 billion units-a-year mobile handset market. He also expects his iPad to start outselling PCs in the near term. Add to that the persistent speculation surrounding Apple’s television ambitions and there seems little to worry about. But detractors claim that Cook is not a “product person” – even though he has done as much as anyone at Apple to wrest control of the mobile user away from the carrier. Crucially, he deputised for Jobs during the founder’s earlier absences – and, lest it be forgotten, he was Jobs’s own choice for the job. The question is how much of his $81 billion cash hoard he might be willing to invest to guarantee that bandwidth capacity keeps up with his demands.
Stephane Richard, chairman and chief executive, France Telecom-Orange
In common with Clint Eastwood, Michael Schumacher and Alan Greenspan, the 49-year old Stephane Richard is a proud recipient of the National Order of the Legion of Honour, established in 1802 by Napoleon Bonaparte. The honour, France’s highest decoration, primarily reflects Richard’s contribution to
French public life – he has served under several French ministers including Dominique Strauss-Kahn. However, he also has extremely ambitious – and aggressive – targets for the network operator including an €18.5 billion investment in new fibre-to-the-home connectivity, the bulk of which will start to flow this year. Expect further acquisitions in Africa and the Middle East, where Richard wants to double revenues by 2015. Richard is ever hopeful of a deal with Google or Apple but his criticism of so-called capacity “hogs” is unlikely to win him many friends.
Steve Ballmer, chief executive, Microsoft
Steve Ballmer’s $8.5 billion purchase of Skype could define his surprisingly lengthy tenure at the helm of Microsoft. Seemingly perplexed at how to tap into the explosion in VoIP services, Ballmer has signed the biggest acquisition cheque in Microsoft’s 36-year history. Integrating Skype could well prove tough: How will carriers react to a combined Microsoft/Skype offering that looks designed to kill them off? Can Skype kickstart the distinctly underwhelming Windows Phone platform? And perhaps, most crucially, how will Skype fare in the notoriously combative fiefdoms that make up the Microsoft empire?
All these questions, Ballmer must answer while also trying to jolt some life back into his flagging share
price. With the sorry debacle of his $500 million Danger acquisition still lingering, Ballmer could yet risk losing the confidence of Bill Gates, as well as powerful investors on Wall Street.
Jeff Bezos, chairman and chief executive, Amazon
Jeff Bezos loves books. He built the world’s largest (online) bookstore and then reinvented the humble paperback for the digital age. (And yes, his wife is a novelist.) An early backer of the Segway scooter, Bezos,
48 this year, is also investing heavily in public space travel. But Amazon is so much more than the world’s biggest e-tailer: its web services business, for example, sells cloud computing services to customers in more than 190 countries. But it is his flair with consumers that sets Bezos apart from rivals: He instinctively knows what the public wants before they do and that makes him, arguably, the person most likely to fill the void left by Steve Jobs. His Kindle Fire could loosen Apple’s grip on the tablet market; while his Android-powered
smartphone might hit the iPhone brand hard. Expect Bezos to slam the door in the face of other content service providers as he loads up his Wifi-only devices with exclusive Amazon content. Competition will be fiercer when second-generation versions of both devices appear. Also expect acquisitions as he tries to exploit Apple’s power vacuum.
Randall Stephenson, chairman and chief executive, AT&T
There’s more to life than T-Mobile and 50-year-old Randall Stephenson will be looking to prove precisely that this year. In the last four years, the affable Stephenson has reinforced AT&T’s position as the world’s largest telecommunications company with a perceptive vision that saw him tie up Apple’s iPhone and a clinical execution that saw him expertly manage the process when exclusivity finally lapsed last year.
Expect Stephenson, a national board member of the Boy Scouts of America, to pursue wireless spectrum with a dogged zeal ahead of what he sees as the next step in device evolution – machine-to-machine connectivity. Expect also, a major push on AT&T’s U-verse platform.
Jim Crowe, chief executive, Level 3
Widely accepted as one of the industry’s true visionaries, Crowe famously used to sharpen his mind by getting up at 2am to drink coffee and read books. He has weathered the tech bubble and the credit crunch and has built a $37 billion network on the simple conviction that bandwidth, like water, food and air, is a basic necessity of modern day life.
But the journey hasn’t always been smooth and Crowe’s reputation took a battering after he loaded up the company’s balance sheet with huge debts to finance a string of deals in the metro market. With the successful acquisition of Global Crossing now behind it and Wall Street cheered by progress on integration, Level 3 is likely to get back into the fray, either as a predator – analysts would like to see a tie-up with any number of metro fibre providers – or as a target itself.
Vinod Kumar, chief executive, Tata Communications
One year into the job, Vinod Kumar, chief executive of Tata Communications must surely be disappointed that the long slog back to profitability is unlikely to materialise this year, and possibly not even in 2013.
Analysts are worried whether the 45-year old boss, who has been heavily involved in Tata’s ambitious growth strategy since joining the business in 2004, can wrestle free of a crippling $1.4 billion debt burden. Crucial to that goal will be Tata’s South African network, which is also battling to claw its way out of the red. Expect more of a push from the company into cloud services, which Kumar sees as a cornerstone of future revenue growth and further expansion into the media and entertainment arenas.
Steve Perlman, founder and chief executive, OnLive
When, as a child, Perlman’s parents refused to let him have a computer for fear that he would spend all his time gaming, he went out and built his own. Thus one of America’s most profligate electronics inventors was born.
Today, Perlman has more than 100 patents to his name, another 100 pending and a truly astonishing CV: he led the development of Apple’s QuickTime in the mid-1980s; co-founded WebTV (later bought by Microsoft for just under $500 million and used in the development of the Xbox console); created Mova, a digital face-mapping system that won him an Oscar for visual effects; and built up OnLive, the cloud-based gaming company. Now he has invented an experimental wireless platform that claims to deliver unlimited bandwidth connectivity without requiring a cell tower, merely a base station the size of a router. He claims that the initiative could make fibre networks obsolete, although the technology has yet to undergo robust testing and we are years away from a commercial product.
Neelie Kroes, European Commissioner for the Digital Agenda
The 71-year old Dutch watchdog with a ferocious bite – remember her long-running pursuit of Microsoft while at the helm of Europe’s competition commission – Kroes has put together a development plan comprising no less than 100 key action points where she wants to see concerted progress this year. High up her “to-do” list for 2012 is an ongoing commitment to see member states comply with the Next Generation Access rules laying down incentives to help encourage investment. Kroes, whose family fortune comes from a transport business, has an ultimate goal: to ensure that every resident in the EU – 500 million at the last count – has access to a broadband connection of 30 megabits a second or more by 2020. Kroes is committed to implementing legislation this year to allow wireless broadband access to radio spectrum.
Sanjiv Ahuja, chairman and chief executive, LightSquared
Bankrolled by Philip Falcone, one of Wall Street’s richest hedge fund managers after betting on the collapse of the US housing market in 2008, Ahuja, the 55-year old former chief executive of Orange, is set for a busy year. His biggest challenge is to soothe regulatory fears that his network will use spectrum that interferes with GPS navigation systems.
There is also talk of a possible initial public offering, though analysts say that Ahuja, who once claimed that the best way to motivate staff is to personally serve them ice cream, is more likely to pursue some sort of tie up with both Sprint, which last year agreed to build LightSquared’s LTE network for $13.5 billion and Clearwire, the network operator in which Sprint holds a majority stake. Ahuja has a mountain to climb: he has to finance the build-out and source the equipment but can only go to his backers once he has enough wholesale carriers on board to make the numbers stack up. Ahuja is planning to launch his new network later this year.
Steve Collar, chief executive, O3b
If you are a former rocket scientist, then you probably aim high. So full marks to Collar, who will this year edge closer to his dream of providing broadband connectivity to the “other 3 billion” (hence the company’s name) – that chunk of the world’s population who currently cannot access the internet. The first four satellites are due to launch in 2013 and another four will follow shortly thereafter.
Collar, who joined O3b last February, played a pivotal role in securing $137 million late last year from backers, including Google. He will use the cash to launch a further four satellites and the ultimate aim is to get 20 satellites into orbit in the near term. Under Collar, the company has already secured commitments for about one-third of the capacity of the first eight satellites and some regions under Phase 1 of the roll-out are effectively sold out. Collar has extensive experience in M&A and could look to utilise those skills again.
Craig Gentry, cloud guru
Craig Gentry is living proof of IBM’s determination to stamp its mark on cloud services. Gentry, a Harvard Law School graduate and a former specialist in intellectual property law, took a three-month internship with IBM while studying for a PhD at Stanford in 2008.
He re-wrote the rule book on computer privacy when he cracked the puzzle of “fully homomorphic encryption”. In short, he devised a way for data to be encrypted in such a way as to allow a third party to perform any mathematical calculation on the data, without actually unscrambling it. The US government’s defence and intelligence research agencies last year agreed to plough $20 million into Gentry’s research and while problems still linger – he needs a huge amount of computer processing power to make it work – a new paper is in the pipeline and may be published as early as this year.
Virginia Rometty, chief executive, IBM
The first woman to lead “Big Blue” and only the ninth chief executive to run the US computer giant in the last 100 years, Virginia “Ginni” Rometty, 54, has a lot to live up to. Formerly head of sales, marketing and strategy, she is seen as the driving force behind IBM’s hugely successful $3.5 billion acquisition of PricewaterhouseCoopers in 2002. All eyes will be on how much of IBM’s $11 billion war chest Rometty earmarks for acquisitions in the cloud arena in an effort to expand into the enterprise market. Expect Rometty, who has been with the company for more than 30 years, to follow closely the five-year plan set out by her predecessor, which promises to add $20 billion to revenues by the end of 2015, largely through its commitment to the cloud.
After all, Rometty was one of the few insiders who contributed to the plan. An avid scuba diver, Rometty may not have persuaded Warren Buffett to put $11 billion into IBM, but her biggest challenge for 2012 will be to keep the famous technophobe very much on board.
Julius Genachowski, chairman, Federal Communications Commission
Being a specialist in heart resuscitation probably comes in handy when you deal a killer blow to last year’s biggest telecoms merger. Good job then, that Genachowski, who studied alongside President Obama at Harvard Law School, is an accredited paramedic.
Genachowski continues to focus the FCC on digital communications and, in particular, broadband connectivity and will also push measures to free up spectrum in support of the National Broadband plan. But the former journalist, who wrote speeches for a former CBS News chief, will also face some challenges, not least a legal move from Verizon aimed at overturning net neutrality rules which establish the agency’s legal jurisdiction over the internet.
Ronan Dunne, chief executive, O2
A passionate sportsman and one-time rugby full-back, Ronan Dunne has been with O2 since just before the mobile operator was demerged from BT in 2001. The 47-year old Irishman stepped up to the top job in January 2008 and has since won begrudging praise from competitors for his tenacity in keeping customers loyal to the brand with a slew of initiatives including priority to sporting and music events and a soon-to- be-launched mobile payments service. O2’s churn rates are consistently among the lowest in the sector, helping to boost the operator’s profits ahead of rivals, despite a shrinking market and an uncertain economic outlook.
Expect Dunne to continue his vociferous campaign to ensure that O2 gets a fair crack at the forthcoming auction of LTE spectrum in late 2013. Expect him, also, to fight hard for new investment from Telefonica amid niggling suggestions that the Spanish owner is prioritising other parts of the business.
Andy Rubin, senior vice president of Mobile and head of Android, Google
The son of a psychologist, Andy Rubin’s credentials are a formidable mix that puts him high up the list of people to watch this year. He started out at Apple, co-founded both Danger (which developed the Sidekick mobile phone for T-Mobile) and Android and has worked (twice) for Microsoft. Instigator of “Bacon Sundays”, a ploy to get programmers to pitch up at Google’s high security complex on unpopular weekends, Rubin commands fierce loyalty among employees: after the launch of the first Android phone in 2008 triggered a multi-million dollar stock payout, Rubin handed out bonuses of up to $50,000 to every staffer in his division.
This year, Android is expected to generate $1.3 billion in advertising sales and will eventually contribute upwards of one-third of total revenues, analysts say. With the purchase of Motorola, Rubin is expected to take a very hands on approach to design, which may or may not go down well with other phone makers still working to the Android blueprint.
Martin Creaner, chief operating officer, TM Forum
With more than 25 years of experience in the telecoms sector behind him, including stints at BT and Motorola, Martin Creaner now devotes his life to the TM Forum, a trade body representing more than 750 telecoms companies in 185 countries. Central to his work, are initiatives to standardise frameworks in the industry. His mantra is simple but effective: if you establish a mechanism for setting out service provider standards, then suppliers will fall over themselves to meet them.
Admirers say that Creaner has done much to open up the cloud to all comers by bringing service providers, technology suppliers and business customers together to set the operational standards for cloud computing rather than simply wait for a couple of mega-players to foist their own will on the rest of the market.