Capellas and Ricke - what the tale of two telcos tells us

The end of the week has been characterised by two big telcos filling their top jobs. WorldCom has hired Michael Capellas, ex of Compaq (and most recently HP), while Deutsche Telekom has promoted board member Kai-Uwe Ricke on the day it turned in record losses.

Both face challenges, to put it mildly. But arguably more interesting than what's ahead is the talk they've been talking.

Capellas, generally seen as a "crisis junky", to quote one journalist (he also took over at Compaq after a tricky period), talks about a commitment to the highest possible level of integrity. Ricke talks about "much to change... thoroughly and without compromise".

Both, of course, say they will be surrounded by good people and there is no point in throwing out the good with the bad but the message is clear - they represent a new start, a clean slate.

There is still a huge question mark hanging over WorldCom's future. The company has been discredited and many customers will have been put off them forever. But Capellas makes it sound like they have a chance.

Deutsche Telekom, however, won't fail. It faces problems of E64bn of debt, a bloated workforce protected by Germany's strong labour laws and two of the scariest shareholders it could have - the government, still with a 43 per cent stake, and legions of small investors, many of whom will have been tempted into share ownership by the late nineties privatisation of their national carrier. But these factors simply make a turnaround all the more crucial.

The downturn has led to a fundamental move to conservative strategies at companies such as Deutsche Telekom and WorldCom as well as at countless others. It is ironic, given technology hasn't stopped advancing, but a necessary retrenchment.

The big question mark - and one these appointments prompt - is whether companies that grew, stalled and are now looking for a lifeline, can do so with the same leaders?

This past week has also seen Cable & Wireless, another telco with long internet tentacles, limit its ambitions. Can its CEO, Graham Wallace, survive the downturn?

Top bosses who rode the first internet boom and who will be around when the IT and communications markets start to take off again will have proved themselves strong indeed.