Portugal's telecoms star rises onto global stage

Reuters

* Zeinal Bava to be CEO after Portugal Telecom, Oi merger

* Track record of winning customers, cutting costs, deals

* But faces Carlos Slim, Telefonica in key Brazilian market

By Andrei Khalip

LISBON, Oct 8 (Reuters) - Known as "Zeus" at PortugalTelecom for turning round an ailing firm in an economic crisis,Zeinal Bava will find he is a lesser deity on the global stageas he tries to build an industry champion in thePortuguese-speaking world and beyond.

But the 47 year-old former investment banker, who is set tobecome chief executive of a merged Portugal Telecom andBrazilian telecoms group Oi, is used to starting at the bottom.

While studying engineering in London and management inLisbon, the Mozambique-born scion of merchants took jobs sellingcookies and shirts before his rapid ascent in banking and thenat Portugal Telecom, which he joined in 1999 and leftearlier this year to take the helm at Oi.

With a track record of winning customers, cutting costs andsavvy dealmaking, Bava seems well qualified for the industry'stop table and to revive an underperforming Oi in a fast-growingBrazilian telecoms industry that looks ripe for consolidation.

"I've never heard anyone criticise him," said Eduardo Tude,head of the Teleco consultancy in Brazil. "His strengths are hisexperience and the work he's done at PT (Portugal Telecom), aswell as his vision for the sector."

But Bava will be competing with telecoms industryheavyweights, including his personal friend Mexican billionaireCarlos Slim, the owner of America Movil which rivalsOi in Brazil, as well as Spain's Telefonica.

While Oi is Brazil's biggest fixed-line telecoms firm, itlags Telefonica's Vivo, Telecom Italia's TIM and American Movilin the rapidly expanding mobile sector and is losing customers.

With Telefonica tightening its grip on Telecom Italia, many analysts expect a break up of TIM. By mergingwith Portugal Telecom, Oi aims to make cost savings and putitself in a better position to raise equity in order to takepart in any consolidation and reverse its underperformance.

Bava's work at Portugal Telecom suggests he's up to the job.

"THE MESSI OF TELECOMS"

After joining the former state-owned monopoly as financechief, Bava became chief executive in 2008 of a largelyfixed-line business losing customers.

Five years on, and despite Portugal's prolonged recessionand international bailout, subscriber numbers are up 14 percentafter Bava led a drive to bundle together traditional fixed-lineservices with pay-TV, internet and then mobile services.

While operating revenues plunged in the depths of thecrisis, they have now recovered to 2008 levels, and operatingcosts are little changed despite an expansion of the network.

The cost control - which included an innovative adaptationof Israeli software initially designed for the military toinstall and service bundled kits - bodes particularly well forthe Portugal Telecom merger with Oi, with analysts' scepticalabout the combined firm's goal to make $2.5 billion of savings.

Bava also got a taste of dealmaking, expanding PortugalTelecom's presence in fast-growing Brazil and Angola andstriking a lucrative asset sale with Telefonica in 2010.

According to former colleagues, he was involved in allaspects of the business, even down to answering client calls andoffering products on the doorstep - a hands on approach he hascontinued in Brazil, to the surprise of his sales team.

"He can be tough but he doesn't raise his voice often. He'sintolerant of incompetence, but not to errors that come fromtrying," said a long-term collaborator who did not want to benamed.

After being awarded the title of Best Technology, Media &Telecom CEO in Europe by Institutional Investor magazine threetimes, including this year, Bava attracted another nickname -"The Messi of telecoms" - after Argentine soccer star LionelMessi, who has scooped a string of sporting awards.

But it was not all good news at Portugal Telecom under Bava,as its debts rose and share price approximately halved.

"It's hard to blame Bava for these mostly external impacts,although maybe he should have reduced the company's indebtednessinstead of paying out dividends. But then it kept shareholdershappy," said a sector specialist who declined to be named.

Bava's long-term colleague said his cosmopolitan backgroundwould be a big asset in dealing with global industry leaders.

Brought up a Sunni Muslim and from a family with Indianorigins, Bava is married to a Portuguese Catholic, and hisbanking career saw him work at Warburg Dillon Read, DeutscheMorgan Grenfell and then Merrill Lynch.

He is more comfortable speaking English, with a crisp Cityof London business accent, than Portuguese, which he speaksfluently but peppers with English terms and expressions.

"He thinks in English, his approach is more Anglo-Saxon. Buttruly, he's very cosmopolitan, a citizen of the world and thishelps him a lot in his task of growing more and moreinternational," the colleague said.

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