Zeus Names MMO2’s Dave McGlade as New Intelsat CEO

Telecom veteran Dave McGlade will lead Intelsat when the Zeus Holdings’ buyout is finalized in the first quarter of this year, officials said Mon. When the transaction is complete, McGlade will join Intelsat, and Conny Kullman, Intelsat’s chief since 1998, will become chmn.

For the last 4 years, McGlade has led the turnaround of O2 UK, MMO2’s UK mobile phone operation, Zeus said. He boosted O2 UK’s customer base to over 14 million while increasing revenue by 20% and operating profit by 40% during the first half of 2004. Last month, MMO2 announced McGlade would step down as CEO on March 31 to return to the U.S. “to take up an exciting new opportunity.” Zeus officials were tight-lipped about who they tapped to steer Intelsat in the weeks leading up to the announcement. A source close to the deal said McGlade’s name may have been floated by Inmarsat CEO Andy Sukawaty, who once worked alongside him as MMO2’s deputy chmn. Apax Partners and Permira, 2 of the 4 private equity firms that created Zeus, own 25.8% each in Inmarsat (CD Dec 29 p2).

At MMO2, McGlade spearheaded the creation of a joint venture with Tesco, the U.K.’s largest retail group, positioning his company to address underserved market segments, Zeus said. Prior to joining MMO2, McGlade worked in the U.S. cellular industry as a regional pres. for Sprint PCS and in the cable industry where he was head of cable ad network Cable AdNet and subsequently at TCI Telephony Services.

McGlade’s record at MMO2 speaks for itself, and Zeus did well to “think outside the box and to reach beyond the satellite industry in looking for executive talent,” said attorney Phillip Spector. Perhaps what made McGlade attractive was that he came to MM02 -- a British Telecom spinoff that had been run by a govt. monopoly -- as it was evolving from a bureaucratic business model to a more entrepreneurial climate, Spector said: “Intelsat is at the same point in its development and has been working to shake off the vestiges of a bureaucratic culture and become more entrepreneurial.”

The fact that McGlade is not a satellite insider doesn’t seem to concern industry attorneys and analysts. One source said Intelsat wouldn’t be wise to put such a large amount of capital -- and ultimately the success or failure of the venture -- in the hands of the old guard. Other satellite companies have found strong leaders from unlikely places, some satellite veterans observed. For example, PanAmSat CEO Joe Wright was formerly director of the federal Office of Management & Budget and a deputy secy. for the Commerce Dept.

Kullman called McGlade an accomplished telecom executive who has considerable experience in a number of adjacent markets, and MMO2’s Chief Executive Peter Erskine said he’s leaving the company “in the best shape it’s ever been.” Zeus officials complimented McGlade’s “exceptional track record of delivering strong operational performance in highly competitive markets.”