Qwest names telecommunications veteran as CEO

NEW YORK (Reuters) - Qwest Communications International Inc. (Q.N) on Monday named Edward Mueller, a telecommunications industry veteran and former CEO of retailer Williams-Sonoma, as its new chief executive.

Qwest shares rose 2.5 percent in early trade after the company said Mueller, who will also serve as chairman, would succeed CEO Richard Notebaert, who is set to retire on August 15.

Notebaert, along with recently retired Chief Financial Officer Oren Shaffer, helped Qwest get past hefty debt, after the technology bubble burst, and an accounting scandal several years ago that led to former CEO Joseph Nacchio's conviction on insider-trading charges.

Mueller, 60, has more than 34 years of telecommunications industry experience, Qwest said. He was CEO of Ameritech from 2000 to 2002 and CEO of Pacific Bell from 1997 to 1999. He served as CEO of Williams-Sonoma (WSM.N) from 2003 to 2006

Qwest, whose shares have more than doubled in price since Notebaert has been at the helm, is one of the smaller of the former "Baby Bells" and is considered particularly vulnerable to growing competition from cable companies and declining sales of traditional phone services.

Unlike industry leader AT&T Inc. (T.N) and No. 2 carrier Verizon Communications Inc. (VZ.N), Qwest does not have a wireless service. Also, its territory, which includes Arizona, Colorado and Wyoming, is seen as more difficult and costly to maintain and deploy new services.

In the Qwest statement announcing his appointment, Mueller said he saw "great opportunity for continued growth" at Qwest but did not elaborate on plans for the company.

Some analysts have speculated that Qwest may be looking for a merger or buyout.

Separately, Qwest said it would pay Mueller an annual base salary of $1.2 million, with a target bonus percentage of 200 percent. Mueller's compensation package includes options to buy about 2.08 million shares at Friday's closing price of $8.37 a share, and a restricted stock award of 896,000 shares.

Shares of Qwest rose 18 cents to $8.55 in active morning trade on the New York Stock Exchange.

(Reporting by Franklin Paul and Lilla Zuill)