Hawaiian Telcom
gets CEO
Michael Ruley will run the local
phone company, which Verizon is
selling to the Carlyle Group
The former head of a Houston-based telecommunications company has been tapped by the Carlyle Group to become chief executive officer of Hawaii's leading local telephone provider.
Michael Ruley, 44, was named yesterday to take the reins of Hawaiian Telcom, which is what Verizon Hawaii will be called if the Carlyle Group's $1.65 billion purchase of the company gets approval from the state's Public Utilities Commission.
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Ruley, who will move to Hawaii and begin work for Hawaiian Telcom immediately, had been president and CEO of NextiraOne LLC since April 2003. NextiraOne, which has 3,500 employees, is a business-to-business telecom provider. At NextiraOne, Ruley oversaw operations, sales, marketing, finance, legal and human resources.
"Mike is a talented CEO who helped establish NextiraOne as a strong competitor in the network solutions and service business," said Mark Barnhill, senior vice president for corporate relations at Platinum Equity.
NextiraOne is one of 22 companies in the portfolio of Platinum Equity, an investment firm with about $8 billion in revenue.
Ruley said he was pleased to be part of making Hawaiian Telcom "America's next great independent phone company."
"Together with the dedicated employees of Verizon Hawaii, we will combine technology, creativity and hard work to ensure our customers have state-of-the-art products and superior service," he said. "This is a once-in-a-lifetime opportunity."
One of Ruley's critical roles at Hawaiian Telcom will be overseeing the relocation of key management functions to Hawaii from the mainland. Carlyle has said it would complete the task in nine months.
The aggressive timetable for rebuilding the backroom functions has evoked skepticism from competitors Pacific LightNet Inc. and Time Warner Telecom, which does business as Oceanic Communications, who both depend on their rival's services for their own operations. The U.S. Department of Defense and other federal agencies also have expressed reservations because it said the operations are essential to military readiness.
Before NextiraOne, Ruley was president of market sales operations for XO Communications Inc., a national communications services provider that filed for Chapter 11 reorganization bankruptcy in 2002 amid a global telecom meltdown. XO, which changed its name from Nextlink Communications Inc. in October 2000, was forced to cancel plans to expand network operations into Europe that year. In 2001, XO began trimming its work force and the next year sold its European Internet services operations. XO emerged from bankruptcy in 2003 with financier Carl Icahn controlling the company.
During his five years at XO, Ruley managed a 1,500-person sales force and support organization and customer care delivering nearly $1 billion in annual revenue.
William Kennard, managing director of the Carlyle Group, said Ruley was the right person to lead Hawaiian Telcom.
"Mike is a proven telecommunications CEO with experience in every aspect of the phone business," Kennard said. "His experience demonstrates that he knows how to add new products, grow revenue and compete."
Scot Long, business manager of the International Brotherhood of Electrical Workers Local 1357, said Ruley's credentials look good.
"I just met him briefly," said Long, whose union represents 1,300 of Verizon Hawaii's 1,700 employees. "I can only reflect on his background, which is extensive. I think what Mike will have to work with is a well-trained management and hourly force that will be a fierce competitor and a great service provider for the state of Hawaii."
Long said the union supports the acquisition even though it still has issues to be worked out with Carlyle. He is particularly glad to see the buildup of the backroom operations that will lead to expanded local employment.
"I think the overall product, once we complete the sale, will be one that the state can be proud of and one that will be locally focused," he said.
Verizon Hawaii President Mel Horikami said he was looking forward to working with Ruley.
"Our challenges are considerable, but the opportunities are great," Horikami said.
First Hawaiian Bank CEO Walter Dods, who is leading a group of local investors as part of the transaction, said he is impressed with Ruley's telecommunications background. "He will be a great addition to the team."