AT&T’s Dorman: Nowhere to go but up

David Dorman took nearly a month to make up his mind about taking charge of AT&T' operations during its impending breakup. The job will be one of the most challenging in the industry.
Written by Dan Luzadder, Contributor

David Dorman took nearly a month to make up his mind after AT&T Chairman C. Michael Armstrong invited him - over the phone - to take charge of the company's core business operations during its impending breakup.

"I told him I wanted to think about it," Dorman said. The executive was named president of the struggling telecom giant early this week. The two wrangled for more than three weeks before striking "a healthy agreement on what the job should be."

That job will be one of the most challenging in the industry, plunging Dorman into tumultuous seas, as AT&T attempts to regroup from the beating the American business icon has taken on Wall Street over the past year. He will lead the company's consumer and business long-distance divisions, the Network Services Group and Bell Labs - all that will be left after the company spins off its sizable wireless and cable television units sometime next year.

Dorman, chief executive of AT&T's Concert joint venture with British Telecommunications since 1999, said the job comes at an opportune time, when everything looks like it can only go up.

"It's almost serendipity to be lucky enough to come into this at a low ebb," he said. "It's a multidimensional challenge in an industry going through tremendous changes, competitively and structurally.

"We've gone from being the greatest industry on Earth, where everyone should put their money, to one where people say, 'Oh my God, don't invest there,' " he said.

Dorman does not believe AT&T's consumer long-distance business is disappearing. Proof, he said, is the company's customer log for bundled local and long-distance service in New York, which has grown to 650,000, despite heavy competition from Verizon Communications.

International markets also present new opportunity, he said. European deregulation, in particular, is "opening up a key strategic plank for us to participate, to compete and take market share."

Dorman said he does not see AT&T dropping its one-stop shopping - or bundling - marketing strategy just because its wireless and broadband units are being spun off. "Bundling is going to continue," he said. The independent units "will continue to trade with each other, though at more of an arm's-length relationship."

Dorman expects AT&T to continue to experience growth above the industry average, in the data services market. Data services will remain part of the company's consumer business unit.

"From my view, setting the objective to be the premier business communications provider is the appropriate strategy," he said.

Analysts seemed pleased with Dorman's appointment; many called him the "right man at the right time."

"AT&T has lost the hearts and minds of significant enterprise customers, and having Dave there will help keep them on the reservation," said Howard Anderson, senior managing director and founder of the Yankee Group.

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