THE NATION’S BUSINESS

An electronic highway ready for traffic

Peter C. Newman April 11 1994
THE NATION’S BUSINESS

An electronic highway ready for traffic

Peter C. Newman April 11 1994

An electronic highway ready for traffic

THE NATION’S BUSINESS

PETER C. NEWMAN

If there is one Canadian business figure ready to schuss down the electronic highway, it’s Montreal’s Charles Sirois, the visionary chairman and CEO of Teleglobe Inc. A harried-looking 39, with energy to burn, he is determined, within the next five years, to turn himself into nothing less than the head of one of the world’s three largest intercontinental telecommunications carriers. Sirois’s reputation in the industry is so upbeat that no one is betting against his being able to achieve that unlikely objective, vaulting over international giants such as U.S. Sprint Communications Co. and Deutsch Telecom, though it may take longer than he predicts. Seldom pausing to catch his breath in a frantic daily schedule that seems to be choreographed rather than planned in any recognizable, linear fashion, his work habits rival the legendary time-allocation acrobatics of Ted Rogers. (So they can keep track of one another, Rogers owns four per cent of Teleglobe and sits on its board.)

Charles Sirois of Teleglobe wants to turn his company into one of the world’s three largest carriers of telecommunications

By staging a successful coup d’état (backed by a personal stock investment of $83.3 million) against the sleepy incumbent management of Teleglobe early in 1992, Sirois took over direction of one of the country’s most international companies. Teleglobe holds the monopoly (until 1997) on telecommunications traffic in and out of Canada, including transmissions by satellite, undersea coaxial cable and fibre optics. Its facilities, worth $2 billion, serve 240 countries, and in 1993 operating revenues, at $543.9 million, were up 24 per cent from the previous year. If Sirois succeeds in moving his company from its current status as the world’s seventh-largest telecommunications operation in terms of minutes of outbound traffic to number 3 by 1998, it would then rank just behind the U.S. giant AT&T and British Telecom. To get there, he has targeted parts of the American market as well as dispatching his marketing shock troops around the world. They have visited 50 small and mid-size countries ignored by Sirois’s

larger competitors, and he is gradually tying up their communications facilities. Ukraine is one of his customers, as are Poland and the Republic of Moldova.

“I don’t believe Teleglobe’s future resides in perpetuating its [Canadian! monopoly,” Sirois told me in a recent interview. “We have to become a North American, not just a Canadian or overseas, player. We need to grab enough market share in the United States to go head to head with AT&T. At the moment, with 100 per cent of the Canadian traffic, we have only seven per cent of North America’s overseas communications. I want 20 per cent. We also intend to become an active partner in a global mobility concept that will link nearly everybody anywhere on earth through satellites.”

In his grandiose quest, Sirois has enlisted a platoon of outstanding young executives, including André LeBel, Claude Séguin and Guthrie Stewart, who treat their jobs as a way of life. When LeBel recently opened the company’s Hong Kong office, he was able to announce that Teleglobe already owned pieces of 20 submarine cables spanning the AsiaPacific region. The company has budgeted $900 million for capital expansion as part of a five-year plan. As well as owning a stake in the

Intelsat and Inmarsat satellite networks (which cover 110 countries), Teleglobe’s largest single construction project at the moment is as the lead company in a $385-million high-capacity fibre-optic trans-Atlantic cable that will have landing points in England, Denmark, Germany and Iceland as well as Canada, and will stretch overland towards Eastern Europe.

“I believe the biggest competitor of the airlines are telecommunications companies such as ours,” Sirois contends. “Can you imagine a Vancouver-based businessman, who now has to spend 20 hours a week or more on a plane to keep track of his factory in Hong Kong, being able to push a button on his computer and, through the new telecommunications systems, in effect, be on his shop floor, talking to the local foreman who can show him everything that’s going on?”

Sirois was bom in Chicoutimi, Que., where his father ran several successful businesses, including a small paging company. When he was 24 and had earned a master’s degree in finance at Laval University in Quebec City, the father and his uncle, Denis Sirois, expressed their faith in young Charles’s future by backing him with $1.5 million in cash and bank guarantees. Sirois has since spun that stake into a personal fortune estimated at $200 million, held mainly through National Telesystem Ltd., a personal holding company that controls more than 100 Canadian telecommunication firms, mostly paging and cellular phone companies. He divides his time among his Westmount mansion, a country house in Quebec’s Eastern Townships, a condominium in Florida and a Paris apartment near the Arc de Triomphe. In late 1991, Sirois acquired a 17-per-cent stake (since raised to 20 per cent) in Teleglobe from its main shareholder, Bell Canada Enterprises, which holds 22 per cent. The Montreal-based pension fund Caisse de dépôt et placement du Québec owns 16 per cent, while the Ontario Municipal Employees Retirement Fund is in for another nine per cent. Most of these investors, plus Ted Rogers, combined to overthrow the thenexisting management group led by Bill Mackenzie and Eric Baker, giving Sirois his chance to turn the company around.

He has done so with a vengeance and in the process has become one of his province’s strongest and most credible federalist voices. He seems to have mastered everything—except the basic tool of his trade, the computer. “I’m not a techie,” he admits. “The cellular in my car dates back to 1985, and any phone that has more on it than a dial is too complex for me to handle. I’ve never had a computer and I don’t know how to use one. Of course, all the people who work with me carry around their agendas on pocket calculators. I don’t know what they gain by that, especially if their batteries go down. I keep my work schedule in an old-fashioned book, and if it changes I write in the new items.”

If and when he gets to be the planet’s third most powerful telecommunications honcho, perhaps Charles Sirois will break down and program his kids’ VCR. But don’t count on it.