WORLDCOM HUNTS FOR LEADER TO HELP RESTORE CREDIBILITY

John Sidgmore's announcement last week that he would step down as president and CEO of WorldCom sparked much speculation about who could — and would — take the helm of the bankrupt carrier.

Sidgmore, who will return to his previous role of vice chairman, originally intended to bring in a new CEO after the company regained financial stability, said a WorldCom spokeswoman. But according to several sources, Sidgmore's move to set up a committee to find his replacement may have been prompted by WorldCom board members and company executives.

Whatever the impetus, pressure is building to bring in an executive from outside the company, and WorldCom has a big pool of seasoned telecom veterans to choose from. Indeed, the need for WorldCom to wash its hands of the taint of internal corruption is more critical than ever if the carrier is to regain any confidence from the financial community or its customers.

“They need someone completely external from the company with no ties whatsoever to WorldCom, and they need someone that will be a turnaround artist,” said Rod Woodward, industry analyst at Frost & Sullivan.

Sidgmore, who was thrown into the unenviable position of following disgraced former chief executive Bernard Ebbers, has maintained his reputation for having good relationships with employees and strong marketing and deal-making skills. However, many analysts said Sidgmore fell short on the operations side.

“There's a whole slew of alumni from AT&T, MCI and Sprint that [WorldCom] could choose from,” said Jim Andrew, vice president at Adventis.

Former executives such as Bob Annunziata, who was at AT&T and later was named CEO of Global Crossing, and former AT&T President and COO Alex Mandl, who later became CEO of competitive fixed wireless carrier Teligent, are among the names being floated by analysts.

“Annunziata would be a good choice for them, and I know he's shopping around,” Andrew said. “They don't need a salesman as much as they need an operations guy to go in and clean up all the mess.”

But given the highly technical nature of WorldCom's strongest assets, the company still needs to find a CEO with a deep understanding of telecom technology.

The company may even turn to retired executives like Edward Mueller, former president and CEO of Ameritech, or Ray Smith, the former Bell Atlantic CEO.

“Sprint's Ron LeMay, who is still working under Bill Esrey, would be a good choice for them,” said David Gross, senior analyst at CIR.

Another name that may be useful to WorldCom's resurrection is Dan Akerson, chairman and CEO of XO Communications. Akerson spent 10 years at MCI and served as president and COO of the company. Moreover, he has the operational experience of running a company in the midst of bankruptcy.

“XO was already a sinking ship when he got there, so that shouldn't be seen as a negative with him,” Gross said.

Whoever WorldCom chooses will face the same task as Sidgmore of cleaning up of the books and paring down service offerings to only the most profitable businesses.

“They can come out with a new smaller, leaner company with lots of customers, and they have one of the best last-mile networks around,” said Andrew. “They have a chance.”