Thales Germany Chief To Leave Company

NEW YORK (Dow Jones)--Edward A. Mueller, a former chief executive of Ameritech Corp. and Williams-Sonoma Inc. (WSM), has been named as new CEO and chairman of Qwest Communications International Inc. (Q), the company said.

Mr. Mueller, 60, will take the lead at Qwest after a tumultuous few years as the once high-flying telecom struggled to get back on solid financial footing in the wake of shareholder lawsuits and investigations as a result of accounting debacles of the early part of the decade.

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Mr. Mueller will be faced with fierce competition from cable companies that are increasingly encroaching on the company's home turf of Denver as well as Seattle and Portland, Ore., with competitively priced phone, Internet and video services. Mr. Mueller will follow former CEO Dick Notebaert, 59 years old, who announced his plans for retirement in June.

Mr. Mueller didn't speculate on changes he had in mind at the company but said, "Any time new fresh eyes come on the scene you can evaluate everything."

In particular, Mr. Mueller said he wanted to maximize Qwest's slogan, "Spirit of Service," to ensure customers' expectations are met.

"I don't think technology gives anyone an edge," Mr. Mueller said. "Everyone else catches up pretty fast. It's what you do with that technology, and 'Spirit of Service' is about the brand."

Mr. Mueller (pronounced Miller) served as president and chief executive officer of Ameritech, a landline carrier that is now part of AT&T Inc. (T), from 2000 to 2002. He is a former president of international operations at SBC Communications Inc., which renamed itself AT&T., as well as a former president and chief executive officer of Pacific Bell. He joined SBC in 1968 and held other executive level positions in the company, including president and chief executive officer of Southwestern Bell Telephone. He became CEO of Williams-Sonoma in 2003.

Mr. Mueller holds a bachelor's degree in Civil Engineering from the University of Missouri and an executive M.B.A. degree from Washington University. In addition to his telecom and Williams-Sonoma experience, he serves as a member of the board of directors at VeriSign Inc. (VRSN), The Clorox Company (CLX) and GSC Acquisition Company (GGA). Mr. Mueller and his family will move from the Bay Area in California to the Denver region.

Frank Popoff, lead director on Qwest's board, praised Mr. Mueller's telecom background and said his Williams-Sonoma experience made him a well-rounded candidate.

"Ed was the best balanced in terms of embracing ongoing growth and operational excellence," Mr. Popoff said. "All those years at AT&T telephony are in his blood."

Mr. Notebaert during his tenure cut thousands of jobs, pared back benefits and reduced the company's debt by more than 40%. He had taken over after Joseph Nacchio resigned in mid-2002 as the company's stock plummeted after investors learned of what many of them believed to be improper accounting methods at the company. Mr. Nacchio was recently sentenced to six years in prison for insider trading.

Mr. Mueller's appointment was official Friday morning. Mr. Notebaert will stay on until Wednesday and said he would offer unpaid assistance as needed thereafter. Mr. Notebaert had recommended Mr. Mueller to the board.

"What Ed walks into a very competitive marketplace with changing technologies and that's where his retail experience really will serve our company and shareholders well," Mr. Notebaert said. "He's a people guy."

Mr. Mueller will need to come up with a plan to jump ahead of cable as customers continue to drop landline phone service in favor of less expensive alternatives and wireless connections. Other phone companies are combating the same problem by spending millions to offer their own souped up, Internet-based TV service to compete with cable, but Qwest has not done so and instead offers TV through a partnership with satellite provider DirecTV Group Inc. (DTV) And unlike the other major phone companies, Qwest does not own a high-growth wireless unit though it resells service from Sprint Nextel.

In the second quarter of this year, Qwest's net income more than doubled, helped by further reductions in spending. Qwest added new customers for its bundled packages of Internet, phone and television services while the number of traditional phone-service customers fell 7%.

Under Mr. Notebaert's leadership, Qwest tried unsuccessfully to acquire MCI Communications Inc. but lost out to Verizon Communications Inc. (VZ) after a lengthy battle. In recent months Mr. Notebaert failed to garner interest in other possible mergers for Qwest and lost key executives as his chief financial officer, Oren Shaffer, as well as others retired.

Recruiters Spencer Stuart handled the CEO search for Qwest.