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AT&T Wireless CEO leaves
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March 9, 2000: 7:57 a.m. ET
Hesse, rising telecom star, gives up pending IPO; Gyani assumes reins
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NEW YORK (CNNfn) - Dan Hesse, the president and chief executive of AT&T Wireless Services, is walking away from what could become the largest U.S. initial public offering ever to head up TeraBeam Networks, an Internet startup company, the companies confirmed Thursday.
At least one IPO analyst said the departure could impact the timing and perhaps the price of AT&T's proposed plan to take part of its newly formed Wireless Services group public this spring, but company officials said the offering will proceed as planned.
Hesse, 46, creator of AT&T Wireless' popular Digital One Rate plan, was considered one of the telecom company's rising stars. His defection continues a troubling trend in top executive departures at AT&T over the last six months that included Leo Hindry, former president and CEO of AT&T Broadband and Internet Services and James Pagos, the former chief operating officer of AT&T Solutions.
Hesse's decision to leave the nation's No. 1 wireless company comes at a particularly pivotal point. AT&T Corp. (T: Research, Estimates) announced last month that it would sell off roughly 19 percent of its wireless concern, raising a projected $10 billion.
That would rank the sale as the biggest U.S. IPO in history in terms of money raised, surpassing the $5.4 billion United Parcel Service Inc. raised last November, and rank it as the second-most profitable IPO worldwide, behind Italy's Enel Spa, the electric utility company that raised $16.5 billion last year.
By some estimates, Hesse stood to gain stock options from the offering valued at more than $50 million, according to the Wall Street Journal, which first reported Hesse's departure Thursday.
AirTouch veteran named as successor
AT&T moved quickly to appoint Mohan Gyani, the former chief financial officer of AirTouch Communications, to replace Hesse Thursday.
Gyani, 48, joined AT&T recently as CFO of Wireless Services. Company officials were quick to point out his successful track record at AirTouch, where he played an instrumental role in the company's IPO and subsequent merger with Vodafone (VOD: Research, Estimates).
AT&T spokeswoman Adele Ambrose said the management shakeup would have no impact on the company's plans to take its highly profitable wireless unit public. AT&T shareholders are expected to approve the plan next week, meaning the company will likely hit the open market sometime in mid-April.
"There is a strong management team in place and Gyani is a veteran," she said. "He's well-known on the Street, so we don't anticipate any changes."
But Jeffrey Hirshkorn, senior market analyst with IPO.com, said the change could spook investors.
"When you have a management shakeup, it tends to push things back a little," he said. "I think it may cause some nervousness among investors and hit AT&T's stock today."
Shortly after the opening bell Thursday, AT&T shares lost 3/4 to 52-1/4.
TeraBeam to unveil technology
Hesse assumes control of TeraBeam just days before the company plans to debut its trademark product: a new technology that beams data by laser through the air, helping to eliminate the last-mile bottleneck of today's bandwidth-intensive networks.
By its own admission, the Seattle-based company has been operating in "stealth mode" the last 30 months as it developed the technology. The company plans to unveil its product at the PC Forum Monday.
In a statement released by his new employer, Hesse stated he was joining TeraBeam to help take "the future of network communications to the next level."
Hesse was not immediately available for further comment.
"Hesse brings us unrivaled market savvy and global service experience, perfect matches for the revolutionary services we will be introducing later this year," said Greg Amadon, TeraBeam's founder and chairman.
An earlier version of this story mistakenly said Brian Malony had resigned as chief operating officer of AT&T Solutions. Malony replaced Pagos, 51, who retired from AT&T to head up Marubeni Corp., a new data communications venture. 
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AT&T Corp.
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