At&T; Picks New President, Heir Former R.R. Donnelley Chief Will Succeed Allen As Chairman

AT&T Corp. has reached outside the telecommunications industry for a new president, picking the chairman of Yellow Pages printer R.R. Donnelley & Sons to lead the company as it faces new competition from all sides.

Beyond simply the No. 2 job, AT&T made it clear that John R. Walter will succeed chairman Robert E. Allen, who plans to step down in 1998. The choice ended some anxious speculation on Wall Street and beyond.

Walter, 49, seemed energetic and confident as he faced the media Wednesday at a news conference to announce his appointment.

“All anyone really knows about AT&T’s future is it will be radically different from the present, and clearly from the past,” he said. “So to assume a leadership role at AT&T is really the opportunity of a lifetime.”

Wall Street was somewhat less excited about AT&T’s choice to fill the key vacancy, which was created when Alex J. Mandl caught the industry unaware and abruptly resigned in August. AT&T’s shares were off about 5 percent on the news of Walter’s appointment.

Mandl’s departure came at a difficult time for AT&T, just as the company was working to implement a three-way split. Now two-thirds complete, it will still create some interesting challenges for Walter going forward.

Other tasks also face AT&T, the biggest long-distance company. It is working to enter the local phone business as others, most notably its Baby Bell offspring, jump into long-distance. It also wants to expand its Internet and wireless offerings.

Allen began his comments Wednesday afternoon somewhat defensive about his little-known choice, conceding AT&T had “considered a number of candidates who might have had more marquee value.” He cited Walter’s lack of telecommunications experience and youth.

“Yet, I and the AT&T board are convinced that he’s the right person for the job at this point in AT&T’s history,” Allen said.

In addition to president, Walter will assume the posts of chief operating officer and board member when he officially joins the company.