Why Mercury's image is the `pits'

BY MARY FAGAN

Industrial Correspondent

Duncan Lewis, the new chief executive of Mercury Communications, has accused management of failing to understand the "crisis" faced by the company in improving its image and service to customers. In a memo to senior managers, Mr Lewis also likens the London headquarters in Red Lion square to a "pit" whose state reflects the company's treatment of its customers.

A company spokesman said: "Mr Lewis uses strong and colourful language to get his points across. He wants to impress on people the urgency of getting customer focus right."

Mercury has been in the throes of restructuring since Mr Lewis took over at the end of last year. In December, it announced it would reduce its then workforce of 11,400 by 2,500 in phases before the end of 1995 and is already ahead of target. The company has been criticised for skimping on service and is thought to have been losing customers in the key City of London market to BT.

In the memo, sent on 10 March, Mr Lewis cited a case where a customer was shoved from pillar to post with directors and staff failing to take responsibility for the problem.

He said that few customers he met after joining had praise for Mercury and that the "depth of the crisis" had yet to be fully grasped.

Mercury has been at the centre of takeover speculation for weeks, with rumoured suitors including BT and AT&T.

The company has largely given up any aspirations to be a force in residential services and faces increased competition in the corporate market from niche players including MFS and Colt.

Industry insiders say Mercury failed to grasp the golden opportunity of having 10 years as the only rival to BT in public telecommunications services.