Senior Partner, Hoey Associates Management Consultants Inc.

John A. MacDonald, president of MTS Allstream’s enterprise solutions division and a former Bell Canada chief operating officer, is set to retire Dec. 1

Before it was taken over by Manitoba Telecom Services, MacDonald joined Allstream in 2002, and one Canadian telecom analyst credits him with saving the company.

“When he went to Allstream, it was certainly a financial basket case and needed significant re-tooling so to speak,” said Eamon Hoey, senior partner at Hoey Associates Management Consultants Inc. of Toronto. “He had, without doubt, some significant challenges when he took over the helm at Allstream. They’ve made significant gains in the last five to 10 years.”

MacDonald did not comment for this article.

When MacDonald joined the firm, it was known as AT&T Canada, which had earlier been formed from a merger of: MetroNet Communications Corp., a competitive local exchange carrier; Netcom, an Internet Service provider; AT&T Canada Long Distance Co.

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At the time, the company was taking on both the incumbent carriers and new competitors, including Call-Net Enterprises Inc., in providing telecommunications services, while relying on incumbent carriers to provide last mile services on a wholesale basis. Several CLECs, such as Norigen, C1 and Axxent had gone under, and Group Telecom had been forced to undertake a restructuring. Call-Net would eventually be bought by Rogers.

In August of 2002, AT&T Canada entered talks with an “ad hoc committee” of bondholders. It had lost $1.3 billion during the second quarter, when it paid $106 million in interest alone. At the time, the company was planning to appeal a CRTC decision that limited the amount an incumbent could mark up its services sold to CLECs on a wholesale basis by 15 per cent.

When he went to Allstream, it was certainly a financial basket case and needed significant re-toolingEamon Hoey>Text

But with $4.5 billion in debt, AT&T Canada was forced to seek protection from its creditors and restructure its debt. It emerged as Allstream in 2003, to reflect that fact that it was no longer controlled by AT&T Corp. and was completely separate from AT&T global services in Canada.

In 2004, MTS bought Allstream for $1.7 billion in cash and shares.

“When they took that company over was really in financial straits and it looked like it was on its last legs at the time,” Hoey told Network World earlier this month. “I think with the help of MTS and its financial capabilities they rescued that company from the clutches of defeat.”

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MacDonald, who got engineering degrees from both Dalhousie University and the Technical University of Nova Scotia, started his career at NBTel. After leaving Bell in 1999, he headed Leitch Technology.

“John is one of the most highly respected individuals in our industry,” Hoey said. “His breadth of knowledge in particular and its applications exceeds that of most CEOs in the country, and in the industry in North America. He’s respected for his gentlemanly way of doing things.”

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