Qwest names new telecom veteran CEO

Qwest has named telecommunications industry veteran Edward Mueller chairman and CEO, replacing the retiring Richard Notebaert.

Mueller, 60, has worked in telecom for more than 34 years, including stints as president and CEO of Ameritech; president of SBC International Operations; and president and CEO of Pacific Bell from 1997 to 1999. He joined SBC, now known as AT&T, in 1968. The Qwest board of directors announced the decision to hire Mueller on Sunday.

After leaving Ameritech, Mueller in January 2003 was named CEO of Williams-Sonoma, which operates retail chains including Williams-Sonoma and Pottery Barn.

Mueller is a "proven leader with a broad background of communications and retail experience," said Notebaert, who retires Aug. 15. Mueller was Notebaert's top recommendation to the Qwest board, he said in a press release.

Mueller, in a statement, said he has "enormous respect" for Notebaert. Qwest has "made great strides in upgrading and solidifying its infrastructure, and has built an impressive reputation for putting the customer first," he added.

Qwest, a telecom carrier based in Denver, conducted a global search for a new chairman and CEO, the company said.

Notebaert guided Qwest through a difficult time in its history. He replaced ex-CEO Joseph Nacchio, who was convicted by a federal jury in April on 19 of 42 counts of insider trading. After Nacchio left Qwest, the company had to restate $2.5 billion in revenue due to fraudulent accounting practices.

Qwest recorded its first year of operational profitability under Notebaert in 2006. In addition to providing telephone and Internet services to customers in parts of the United States. Midwest, Northwest and mountain states, Qwest also has a coast-to-coast fiber optic network and providers telecom services for the U.S. government.

Independent telecom analyst Jeff Kagan praised the hiring of Mueller, but said Qwest faces several challenges. "He may be exactly what Qwest needs at this point," Kagan said. "We will have to see what moves he makes."

Notebaert "did a great job" focusing Qwest on the basics and helping the company become profitable, Kagan said.

But Qwest faces stiff competition from larger telecom carriers and from cable television providers, Kagan said. "They do not own a wireless network and they are not actively pursuing their own television offering, preferring to continue selling the satellite services," he added. "The competitors are rushing to offer the complete bundle of services and they offer them at discount prices in order to win the customer. In that new marketplace the entire customer is competed over and either won or lost by each competitor."

Qwest needs to upgrade its networks and product offerings in order to compete, Kagan added. "During the next several years, if Qwest does not change the direction it is heading, things may get painful," he said.

The IDG News Service is a Network World affiliate.