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NEWSMAKER-Portugal's telecoms star rises onto global stage
October 8, 2013 / 2:05 PM / in 4 years

NEWSMAKER-Portugal's telecoms star rises onto global stage

* 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 Portugal Telecom for turning round an ailing firm in an economic crisis, Zeinal Bava will find he is a lesser deity on the global stage as he tries to build an industry champion in the Portuguese-speaking world and beyond.

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

While studying engineering in London and management in Lisbon, the Mozambique-born scion of merchants took jobs selling cookies and shirts before his rapid ascent in banking and then at Portugal Telecom, which he joined in 1999 and left earlier this year to take the helm at Oi.

With a track record of winning customers, cutting costs and savvy dealmaking, Bava seems well qualified for the industry’s top table and to revive an underperforming Oi in a fast-growing Brazilian 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 his experience and the work he’s done at PT (Portugal Telecom), as well as his vision for the sector.”

But Bava will be competing with telecoms industry heavyweights, including his personal friend Mexican billionaire Carlos Slim, the owner of America Movil which rivals Oi in Brazil, as well as Spain’s Telefonica.

While Oi is Brazil’s biggest fixed-line telecoms firm, it lags Telefonica’s Vivo, Telecom Italia’s TIM and American Movil in 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 merging with Portugal Telecom, Oi aims to make cost savings and put itself in a better position to raise equity in order to take part 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 finance chief, Bava became chief executive in 2008 of a largely fixed-line business losing customers.

Five years on, and despite Portugal’s prolonged recession and international bailout, subscriber numbers are up 14 percent after Bava led a drive to bundle together traditional fixed-line services with pay-TV, internet and then mobile services.

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

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

Bava also got a taste of dealmaking, expanding Portugal Telecom’s presence in fast-growing Brazil and Angola and striking a lucrative asset sale with Telefonica in 2010.

According to former colleagues, he was involved in all aspects of the business, even down to answering client calls and offering products on the doorstep - a hands on approach he has continued in Brazil, to the surprise of his sales team.

“He can be tough but he doesn’t raise his voice often. He’s intolerant of incompetence, but not to errors that come from trying,” said a long-term collaborator who did not want to be named.

After being awarded the title of Best Technology, Media & Telecom CEO in Europe by Institutional Investor magazine three times, including this year, Bava attracted another nickname - “The Messi of telecoms” - after Argentine soccer star Lionel Messi, 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 indebtedness instead of paying out dividends. But then it kept shareholders happy,” said a sector specialist who declined to be named.

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

Brought up a Sunni Muslim and from a family with Indian origins, Bava is married to a Portuguese Catholic, and his banking career saw him work at Warburg Dillon Read, Deutsche Morgan Grenfell and then Merrill Lynch.

He is more comfortable speaking English, with a crisp City of London business accent, than Portuguese, which he speaks fluently but peppers with English terms and expressions.

“He thinks in English, his approach is more Anglo-Saxon. But truly, he’s very cosmopolitan, a citizen of the world and this helps him a lot in his task of growing more and more international,” the colleague said.

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