BUSINESSWEEK ONLINE : JULY 31, 2000 ISSUE
PEOPLE Wiring Europe the American Way Straight-talking Yankee Jack McMaster has big plans to bring high-speed Net access to the Old World the American way Jack McMaster wanted to take a big gamble. It was last December, and the 43-year-old American had arrived in the Netherlands only a few months before to run KPNQwest (KQIP), a joint venture between that country's former telephone monopoly, KPN Telecom, and the upstart Denver-based Qwest Communications International Inc. (Q). So he proposed building a $300 million state-of-the-art fiber-optic network in Spain, part of an ambitious plan to blanket the Continent with high-speed Internet connections. ''In for a dime, in for a dollar,'' McMaster said in his usual folksy slang. The Dutch were dumbfounded. ''What's that mean?'' asked KPNQwest's chief operating officer, Henjo Groenewegen. After a bit more head-scratching, the Dutch signed off on McMaster's plan. But it wasn't the last time he had them guessing. This very American-style executive is wielding in-your-face management techniques in an ambitious attempt to bring fast Internet access to Europe. McMaster is one of a small army of U.S. telecommunications executives who have flocked to Europe to help stodgy stalwarts and new upstarts get a piece of the newly deregulated action there. The overall data-delivery market, now $15 billion, is projected to grow to $53 billion by 2003, according to IDS, the Framingham (Mass.)-based consultancy. If he succeeds, McMaster stands to play a big role in the rewiring of Europe for the New Economy. ''We aim to help fuel an explosion in e-commerce and mobile commerce,'' he says. But that won't be easy. Europe's telecommunications industry has been deregulated for only two years, and already it resembles the Wild West. Dozens of other upstarts, led by MCI WorldCom's UUNet and Britain's Colt Telecom Group, not to mention national goliaths such as France Telecom and Deutsche Telekom, are constructing similar high-speed Internet lines in Europe. McMaster's biggest problem is that the price these pipeline companies can command for zipping data around is plummeting as capacity swells. So far, he has raised $750 million to carry out his plan to hook up 50 cities in four countries. And with the job nearly half done, the network should be in place in late 2001. But the company continues to pile on losses. And KPNQwest's share price has been all over the map, plunging 74% in June, to 24, from a high of 92 in February, only to bounce back to 45. Some worry that falling prices could push back KPNQwest's breakeven point past the promised third-quarter 2001 date. McMaster isn't fazed. Business is booming, and sales should reach $400 million this year, a fourfold increase. Says McMaster: ''I can play this game for a long time.'' Many analysts and telecom observers agree. ''McMaster's experience and business plan separate KPNQwest from the competition,'' says Saeed Baradar, a telecom analyst at Bear Stearns International Ltd. in London. ''CANNONBALL.'' A former AT&T rising star, McMaster was tapped for the job after Qwest Chief Executive Joseph P. Nacchio, a former head of AT&T's consumer and small-business division, and his Dutch partners created the $700 million venture to combine Qwest's technical knowledge with KPN's European experience. The Dutch sought a European to run the company, but Nacchio lobbied for his former AT&T colleague. ''We wanted to create an American entrepreneurial company,'' says Nacchio. ''And we couldn't find anyone from the community with that spirit.'' Like Nacchio, McMaster rose in the rough-and-tumble environment of AT&T's breakup following deregulation in the U.S. As a director of customer service during the mid-1980s, McMaster's job was to smooth relations with corporate customers in the wake of AT&T's breakup. IBM, for example, needed 500 lines from New York to California but couldn't get them from Pacific Bell. So, McMaster flew four AT&T technicians to Los Angeles to speed the process. ''Jack was a go-getter,'' says Harry Bennett, his former AT&T boss and now CEO of Country Road Communications in Morristown, N.J. Bennett, who often skied with McMaster in Vermont, nicknamed his subordinate ''Canonball'' because ''he just went straight down the slope.'' McMaster's career has also barreled along. The son of a blue-collar AT&T worker, he grew up in Rutherford, N.J., where he attended parochial school. After graduating from Manhattan College, McMaster went to night school to get an MBA and a master's degree in international politics from New York University. Later at AT&T (T), he parlayed the degree into a London assignment, where he tried hard to fit in, downing British ale and playing tennis with local staffers. ''He was so different from the average American expats who stayed among themselves in a ghetto,'' says Judi Chadaway, a former colleague and now a director at London headhunter Morgan Howard. In England, McMaster also earned another nickname: ''Shakespeare,'' for his skill in ''roasting'' staffers at send-off or promotion parties. ''Jack inevitably had a great anecdote,'' recalls Dan H. Schulman, a former AT&T colleague who now is chief executive of Priceline.com Inc. At KPNQwest, McMaster's down-to-earth style fits right in with his Dutch co-workers. At first, some Dutch employees were frightened that their new boss would be a clone of Nacchio, who is famed for his fierce temper. Instead, they found a good-natured listener who taught them a new piece of slang every day. ''If Jack didn't approve, he would just say, 'That's a ball out of left field,''' says KPNQwest Chief Operating Officer Groenewegen. FRONT-RUNNER. Of course, it's going to take more than being Mr. Nice Guy to reach McMaster's goal of making KPNQwest a moneymaking leader in the European Internet carrier business. And he's plunging ahead at full speed. In April, the company announced an alliance with IBM (IBM) to build 18 centers to host Web sites for companies such as Nokia (NOK), Microsoft (MSFT), and Lufthansa. ''The IBM deal puts KPNQwest far out in front in Web hosting,'' says James Downie, a telecommunications analyst in London for ABN Amro Holding. McMaster is betting that when the dust settles in the European telecom wars, he'll come out one of the winners. He even wants to remain in Europe indefinitely. His wife, Mary, and their four boys, whose ages range from 2 to 11, live in the ritzy suburb of Wassenaar, just a stone's throw from KPN's corporate retreat. And while McMaster misses the U.S., his free time is taken up coaching his sons' sports teams. He's also getting serious about his Dutch lessons. That includes KPN co-workers teaching him their slang. ''We have a lot of great sayings like, 'You can't get an old cow out of the canal,''' says Joop Drechsel, KPN's international director. That's logical. Now, if only McMaster can make as much sense out of the frenzied European telecom wars. By William Echikson in The Hague _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Wiring Europe the American Way RESUME: Jack McMaster VIDEO: Q&A with Jack McMaster INTERACT E-Mail to Business Week Online

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