AUDETTE
Of course, much of the tremen-
') does progress in service has been
due to the incredible sophistica-
tion of computerized communi-
cations equipment that has
become available this decade, but
Mr. Kaul can be credited with
having kept Bezeq in line with
the burgeoning standards of its
industry.
Although experts only expect-
ed Israel's phone system to be-
\– come fully digitized in the year
• 2005, it has reached this impor-
tant milestone this month, way
ahead of the United States —
where only 60 percent of the tele-
phone exchanges are digital —
and most of Europe.
The replacement of analog
phone exchanges with digital
equipment means there are no
\ mechanical switches prone to get
) stuck, that bills are itemized and
generally much more accurate,
while cabinets full of silent ma-
chines are supervised by a single
staffperson and many new ser-
vices, such as call-forwarding, op-
erator-less reversing of charges,
intelligent network and others
have become available.
Some critics say Mr. Kaul's de-
parture may be coming at a per-
sonally convenient timing, but
a bad one for the company, which
is facing accelerated competi-
tion.
"Bezeq is my first love and the
Postal Authority is the second,"
responds Mr. Kaul, who had
cured the ailing Israel postal ser-
vice before moving on to Bezeq.
"But every job has to be carried
\ out for a certain time, and then
• the time comes to move on to an-
other, taking advantage of one's
enriched knowledge and experi-
ence. I've always preached the
benefits of rotation to my man-
agers at Bezeq, and now I'm prac-
ticing it."
During the last four years,
Bezeq has increased its annual
income, doubled its net profits
w and launched multi-billion-shekel
/- investments in improving tele-
communications infrastructure.
Known as a highly visible
manager, Mr. Kaul received nu-
merous job offers from both Is-
raeli and foreign firms, and even
proposals to go into politics. While
his management skills are much
needed in the highest govern-
mental echelons, he says he has
\_) no interest in
politics or running for office.
Only when the Recanati fam-
ily — whose Israel Discount Bank
has a controlling share of Clal —
made him an offer, did he take
the bite. Mr. Kaul politely de-
clines to confirm or deny that his
new salary will be five times his
current paycheck.
Although Bezeq is the largest
company in Israel, Clal too is
huge, with extensive interests in
real estate (Azorim and Shikun
U'Fituah) to financing (Clal In-
surance) and from finance (Be-
tuha and Clal Manpikim) to
tourism (the Disenhaus Group)
and marketing (supermarkets,
pharmacies, imports).
Mr. Kaul admits that after
spending most of his life in pub-
lic service and communications,
the move to Clal is "a bit daunt-
ing."
"There is no guaranteed suc-
cess," he realizes, "and people will
be watching me closely to see how
I do. But the principles of good
management are pretty much the
same, whatever the position."
"It hasn't been a one-man
show. We have developed excel-
lent management at all echelons
around the country, and our em-
ployees have internalized the
need to provide good customer
service. Obviously, there still are
problems and weak corners
where Bezeq has yet to improve."
His main achievement, Mr.
Kaul suggests, is helping to make
Bezeq's employees "proud to work
here." Now, with de-regulation
and privatization well under way
— through recently conceded
competition in overseas calls, bur-
geoning approval of competition
in local calls, and the imminent
arrival of a third cellular-phone
provider — he concedes that the
company's 9,000 employees are
nervous about the future, which
might result in reduced prof-
itability for Bezeq.
"If you consider the fact that
cellular phone services, overseas
calls, Bezeqbit and Bezeq Zahav
supply 60 percent of the compa-
ny's profits, and that all of these
are facing competition, employ-
ee concern is understandable. But
competition will be good for
Bezeq, greatly expanding de-
mand for these services and new
ones to be introduced."
The staff also know that down-
sizing will continue.
Although 1,200 workers have
gone on early retirement in the
last few years, over the next five
the company's manpower is due
to be reduced by a further 30 per-
cent to about 6,000 workers. "It
probably won't go lower than
that," adds Mr. Kaul, noting that
increased growth in telecom ser-
vices will keep the company big.
Bezeq's organizational structure
will be modified, and technologi-
cal changes will render some jobs
obsolete.
For years, Mr. Kaul has been
pushing for total privatization of
Bezeq, whereby the government
would own no shares in the com-
pany; at present, despite various
stock issues, the government still
has a controlling voice and the
communications and finance
ministers tell Bezeq what services
it may offer and on what terms.
The British communications
company Cable & Wireless, which
already owns 10 percent of Bezeq,
is clearly hungry for more. But,
as Mr. Kaul points out, the gov-
ernment still hasn't decided if it
wants a strategic partner.
(c) Jerusalem Post 1997
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