A window of opportunity

GTE's Charles Lee is in a unique position among telecom executives. His company has fingers in all the plum pies-local, long-distance and data-and isn't restricted with regard to where it can compete by the Telecommunications Act of 1996.

Clif Holliday, a GTE retiree who now runs his own consulting business, says the fact that Lee did not rise through the telecom ranks to head GTE should not lead observers to believe that he's a figurehead.

Holliday recalls making a "highly technical" presentation before Lee and a large group of executives. Lee, he says, was the only audience member who took notes and asked insightful questions. And Lee cornered Holliday after the meeting to ask more questions.

That hands-on leadership has begun taking GTE in a new direction.

"We decided this year to become a growth company," Lee says. "We set a target of $34 [billion] to $38 billion in revenue for 2001."

GTE's major 1997 steps toward that goal included leasing 25% of Qwest's fiber network, forming an alliance with Cisco and acquiring BroadBand Networks. The company now has four "fundamental" business units: network services, CLEC, Internetworking and integrated services, called the Integrator.

GTE faces three crucial short-term challenges, Holliday says. How well can it meld the "disparate technologies, personnel, management styles and corporate cultures" of its acquisitions? Will GTE make the right acquisitions-those that provide not just size but also market synergies and sustainable advantages? And will day-to-day operations suffer as upper management deals with its consolidation and acquisitions issues?

Acquisition concerns must also include avoiding being "gobbled up," especially by a company that is a poor match for GTE, Holliday says. In that regard, Lee's breadth of experience in financial dealings will serve GTE well, he says.

Lee says 1998 will be a key year for GTE as it focuses on building both domestically and internationally, and he is well aware of GTE's temporary advantage over the RHCs and long-distance carriers.

"We have a window of opportunity where we're permitted to do things that others are not," he says.