Jere Drummond helped shepherd BellSouth from a regional Bell to one of the nation's strongest telecommunication companies.
FROM WIRED TO WIRELESS
Jere Drummond, MBA '68, got his first cell phone in the mid-1980s. "It was a terrible one, big and clunky with poor transmission," he remembers. "Back then, cell phones operated from towers, and there were only five to 10 per state." The wireless landscape has changed dramatically since those days, with seven or eight mobile telecommunications companies vying in each of the 50 major metropolitan markets, and, needless to say, Drummond has a much better mobile phone with clearer reception and additional features. In fact, he has three: one that goes with him, one for his company car and one for a personal car. His family members - a wife and three grown children - are also well equipped with cell phones. "How would we do without them?" Drummond wonders.
Just as cell phone technology and the industry have come a long way, so has Drummond and BellSouth. His career began at what was then Southern Bell in the early 1960s, and throughout the next 40 years, he stayed with the company through mergers, divestitures and landmark telecommunications legislation to become vice chairman of BellSouth. In December, as the year drew to a close, Drummond prepared for retirement. Sitting in the midst of packed boxes in his office suite at the corporate headquarters in Midtown Atlanta, he reflected on a career that has seen a company emerge from Baby Bell status to become one of the nation's leading telecommunications corporations offering wired and wireless services. He leaves the telecommunications company he helped build in good shape. With an international reach, BellSouth now owns 40 percent of the shares in the second-largest cell phone company in the United States, Cingular, which serves another 20 million.
DECADES OF CHANGE
Beginning as a traffic supervisor in 1962 in Atlanta, Drummond was destined for leadership. In 1968, with a newly earned MBA in management from the Robinson College, he began his corporate climb up the Bell ranks in New York, the Carolinas and Georgia, serving in the treasury headquarters, in general accounting, as state marketing manager and as a state vice president.
"During those years, I saw a lot of change," Drummond says. One of the biggest upheavals he witnessed was the 1984 divestiture of AT&T, which dismantled the Bell system, forming seven regional companies, including BellSouth. Today, the Baby Bells have consolidated into four companies.
In 1995, Drummond became president and CEO of BellSouth's local telephone service unit, and in 1998 he took over as president and CEO of BellSouth Communications Group. Since 2000, he has served as vice chairman of BellSouth Corporation, responsible for public relations, advertising, brand management, and regulatory and external affairs. He also has led BellSouth's continued efforts to enter the long-distance market.
Another major change occurred with the passage of the Telecommunications Act of 1996, which enabled regional service providers to compete in the long-distance arena. Previously, "there were essentially two licenses for every market, the Bell that operated in that area and one other provider," notes Drummond. "To compare, now you have seven or eight players in most of the major markets." Drummond believes that may prove to be too much competition. "The market won't support that," he asserts.
Still, he believes there is money to be made in long distance and lessons to be learned from other companies. AT&T offers one such lesson. "With the introduction of its minute plans without distinguishing between local and long-distance costs, AT&T cannibalized the long-distance part of their company," Drummond explains. "Today, AT&T is a shadow of its former self. Lucent and Nortel, too, have fallen on hard times."
A DRAMATIC MISCALCULATION
Of all the changes in which he's played a role, Drummond expresses the most surprise at how rapid the change has been in the wireless area. "We dramatically underestimated the penetration of wireless. he says. "I used to predict that there would be one million cell phones in use by the year 2000. Instead, there were 100 million. Today we are at 230 million. Many people now use a mobile phone as their main phone. We give the phones away."
In trying to attract customers to its expanding long-distance and wireless networks, in 2000 BellSouth combined with SBC Communications to form Cingular, the second-largest wireless company in the United States and a major player in 43 of the top 50 markets. "Previously, we were losing money on every minute when a customer used our service to roam, but the merger gave us a nationwide footprint," said Drummond.
BellSouth's wireless expansions have not been limited to the United States, with the company's service now extending to 11 countries in Latin America. Getting customers has been easy in countries where waiting times for receiving unreliable wireline service may extend to a year. "In Sao Paulo, we went from zero to one million customers in seven months," Drummond remarks. Rather, the challenges for BellSouth in Latin America involve procurement of licenses, governmental relations, currency devaluations (particularly in Argentina) and doing normal and administrative business in a foreign country. Despite those challenges, the markets in Latin America offer great rewards, with estimates placing the amount of money generated by wireless at $35 billion by 2004.
FORECASTS FOR A WIRELESS FUTURE
"I think the change we've experienced in the last five years will be miniscule to what is coming," Drummond says. One trend he foresees is the merging of the current eight or so leaders in the telecommunications industry into three or four mega-companies that offer local, long-distance and wireless services all at one contact point and bill on one bill.
Drummond will leave the work of sorting out that scenario to others. "I've been at it for 40 years," he grins. "That's long enough."
Drummond's first planned stop after retirement was Polly's Island, S.C., where he and his wife Patsy recently completed a beach house big enough to accommodate their three children and seven grandchildren. Although Drummond passed through many remote areas in his symbolic transition from Atlanta to the beach, he knew that he'd find a clear enough signal to use his cell phone all along the way.
by Rhonda Mullen
A CAREER IN BRIEF :
1962 Traffic Supervisor for Southern Bell
1968 MBA, management, Robinson College
1968 Assignments at AT&T treasury headquarters in New York
1971 Assignments at Southern Bell's Atlanta headquarters and Georgia accounting operations
1976 General ManagerTraffic, North Carolina
1978 General Commercial and Marketing Manager, North Carolina
1979 MSM, Massachusetts Institute of Technology
1979 General ManagerBusiness, South Carolina
1981 General Marketing Manager, North and South Carolina
1982 Vice President, North Carolina operations
1988 Senior Vice PresidentRegulatory and Pricing, BellSouth Services, Inc.
1988 Senior Vice PresidentMarketing, BellSouth Corporation
1989 Executive Vice PresidentMarketing, Network, and Planning, BellSouth Services, Inc.
1990 Group PresidentCustomer Operations, BellSouth Telecommunications
1995 President and CEO, BellSouth Telecommunications
1998 President and CEO, BellSouth Communications Group
2000 Vice Chairman, BellSouth Corporation
