Outsider Lewis tipped for C&W

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Industrial Editor

Cable & Wireless has ruled out internal candidates for the post of chief executive, which was suddenly vacated in November by James Ross in a dramatic boardroom struggle. Lord Young of Graffham, then chairman, departed at the same time.

The focus on outsiders has fuelled speculation that the job will go to Duncan Lewis, who resigned in September as head of C&W's Mercury Communications subsidiary.

Rod Olsen, finance director, although recently appointed as acting chief executive of C&W, has not put himself forward to take the post full-time.

Temporarily installing Mr Olsen, a New Zealander, requires changes to the articles of association which stipulate that the chief executive must be a British citizen if there is no executive chairman.

An extraordinary general meeting this month to make the change will also clear the way for other overseas candidates to take the job.

Mr Lewis, who has declined to comment, is thought to be keen to stay within the European telecommunications sector. His departure from Mercury in September after only nine months in the job shocked the industry as he was regarded as having turned the company around and given it a much- needed fresh impetus.

There was speculation at the time that his decision to go was partly due to disagreement over the direction in which Mr Ross was steering the C&W group as a whole.

Mr Lewis has been interviewed by headhunters Russell Reynolds, which is expected to draw up a shortlist within the next few weeks. The consensus in the City is that C&W is suffering from a lack of experience of the telecommunications industry within its executive line-up and it seems likely that investors would welcome the appointment of Mr Lewis.

There is a widespread view that the new chief executive will be faced immediately with the task of shaking up Cable & Wireless in defence of a possible bid. City analysts have been speculating for months over a possible bid by BT.

There is also a view that the company needs to restructure radically its cost base, focus more sharply on marketing, and play to its traditional strength of creating strong local brands around the world.

C&W is struggling to restore its credibility following the row between Mr Ross and Lord Young, which erupted publicly before they were both ousted. The BAA chairman, Brian Smith, has since been appointed non-executive chairman of the group.

Separately, it has emerged that C&W is aiming to make 25 per cent of its earnings from mobile comunications by the end of the decade. The target was given to analysts in a briefing last month as part of an effort to shore up the group's image.

There is a feeling within Cable & Wireless that the importance of its many mobile operations around the world is underestimated. Attention is often focused on Mercury One-2-One, the UK mobile arm owned jointly with US West, and on the cellular operations in Hong Kong.

But C&W is involved in mobile telephones in 29 countries and regards itself as potentially one of the big global players in the integration of fixed and mobile communications networks.

The target areas for growth will be Asia Pacific and western Europe.