Telecom giant's strongman has plans for world domination

The village of Trillick, at the foot of the Brougher Mountain in Co Fermanagh, is not the kind of place you would expect to foster…

The village of Trillick, at the foot of the Brougher Mountain in Co Fermanagh, is not the kind of place you would expect to foster a major player in international telecommunications.

Local chat is dominated by milking times and agricultural shows rather than the merits of broadband connectivity or Internet data centres. But this picturesque corner of Northern Ireland is the birthplace of Mr Liam Strong, chief executive of Worldcom International, one of the world's largest telecommunications operators.

Mr Strong heads the division within Worldcom responsible for its business outside the US. Worldcom International spans Europe with a 14,632-kilometre fibre optic network and is expanding into Asia, the Middle East and Latin America. Last year Mr Strong co-ordinated some $1.2 billion (#1.43 billion) in capital investment, the addition of metro telecoms networks in eight countries, and revenues of $500 million.

Under his guidance, the company has extended its product offering beyond long distance and business voice services, its most prodigious revenue earners in the past, to cover value added data and Internet services provided by its wholly-owned application service provider UUNET.

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All this sounds like an impressive record in the telecoms business. But what does a native of Trillick, who studied philosophy and psychology in Trinity College Dublin, know about the technicalities of telecommunications?

Before joining WorldCom in 1997 Mr Strong worked in diverse business sectors including airlines, foods, toiletries, and most recently in the shoe business, as chief executive of Sears.

"I think I found out when working for Reckitt & Colman, where I worked for 17 years, that I had the facility to move between businesses and learn the way of working with technical businesses.

"There are also distinct similarities between telecoms and the airline business in that they are both network businesses and you have to optimise traffic over the network."

However, Mr Strong is also blessed with one very important attribute in business - a fair smattering of good old-fashioned luck.

Dismissed as chief executive of Sears in 1997, following a disastrous period during which the company's shares under-performed the market by as much as 50 per cent, most British commentators wrote him off.

However, just a few months later WorldCom's headhunters singled out Mr Strong's marketing expertise and brand-building skills and installed him as chief executive of its international division.

Aside from marketing and brand-building, it is hard work which has defined the WorldCom job so far, says Mr Strong.

"If you are going to change industry accept the fact that you will have a sore head for at least a year, because the only way to do that successfully is to work the day job, the evening job and the night job," says Mr Strong.

Under his leadership Worldcom International initially expanded into 13 European countries including Ireland, and now employs some 4,500 staff across the continent. But the focus for expansion is now shifting, says Mr Strong.

"All the people we have now are going to Asia, which is growing at 300-400 per cent per year and we are now in eight to 10 countries after just two years," he says. "Asia is the next big growth area."

WorldCom has made some progress in eastern Europe but regulation is slowing growth, according to Mr Strong.

"Because we tend to put assets on the ground and invest in markets we are very careful not to get into it until we are clear deregulation is happening."

This year Mr Strong has turned his attention to internal housekeeping matters and is restructuring the group's European operations. This will see WorldCom's Irish operation, which now employs close to 200 people, split from the company's distinct European business lines into a separate countries unit.

"The reorganisation is market-driven and customer-driven. In the first period after deregulation in Europe it was really important to have a real focus country by country as the situation developed and to go after every customer you could get," says Mr Strong.

"But there are a lot more competitors now with their own networks organised by geography and by customer segment. So for this period we believe we have to really focus on our customer and sit down and think about corporate sales across Europe."

WorldCom will now split its main European organisation into separate business units to target customers on a pan-European level. Some countries, including Ireland, will still be managed on a countrywide level. "The reason why Ireland is in this country group is that it is a high potential market, but it is only on the edge of being big enough to divide up on a European basis and so it would not be cost effective and may well be confusing to do that," says Mr Strong.

He denies this will have any disadvantages for either WorldCom's staff or customers. "In a market that is developing we've tended to find they need special attention or else they will come at the end of the queue. It's like the runt of the litter, it never actually finds a tit," he says.

"We will have someone in Ireland who can make a hell of a noise to make sure they get the right level of development resource."

Since entering the Republic through the acquisition of TCL Telecom in 1997, WorldCom has invested in a fibre optic network in Dublin which has links to the main business parks, and it chose Dublin to be one of the first locations for one of 13 Internet data centres. This 65,000-foot facility will open later this year and will offer Web-hosting facilities to European and US businesses.

"We'll just continue to expand our data centre as demand increases and we are always investing in traffic flow between the Republic and the UK. We are also looking at the possibility of extending a data network to the major commercial centres around Cork, Limerick and Galway."

WorldCom, which dropped out of the UK auction for third generation licences earlier this year, will not apply for a third generation mobile phone licence in the Republic, says Mr Strong

"From an opportunistic basis it might be OK to go for an Irish licence, but what we are trying to do is develop a uniform pan-European presence. We find that building a model and rolling it out country by country is more economical and we get better value."

Mobile communication is an area where WorldCom has failed to develop a recognised presence or strategy. This could pose major problems for the group going forward.

The company is pinning its hopes on becoming a mobile virtual network operator throughout Europe and is in talks with several operators throughout Europe. But this will not be easy because of the different mobile network regulations in place throughout Europe.

"We generally find in Europe that you get further by talking but we clearly are prepared to litigate if we have to," says Mr Strong.

The uncertainty surrounding the group's mobile strategy has affected share price, which has fallen more than 50 per cent to below $26 this year.

This has been compounded by the group's failed merger with the US long distance and wireless operator Sprint due to regulatory concerns.

But the whole telecoms sector is caught in a rut, with high network investment costs coupled with falling margins on voice calls. The fear for Mr Strong must be that telecommunications could become as low margin and difficult a sector as the shoe business.

With investors becoming increasingly impatient for returns the pressure is mounting on WorldCom's management. It remains to be seen if the company's internal reorganisation and increasing focus on Internet technologies can turn the tide. A touch of Mr Strong's luck would now come in handy.