AT&T Corp has appointed Hughes Electronics Inc chairman C Michael Armstrong as its new chairman and chief executive officer. The lumbering giant of US telecommunications, surrounded by younger and more aggressive rivals, has been handicapped over the past three months by the lack of a successor to departing chairman Robert E Allen while competitors such as WorldCom Inc and GTE Corp are battling for acquisitions to help them become even more formidable players. Now Armstrong is at the helm AT&T, which today announced its third quarter results (see Financial section), will be able to evolve a clear strategy after criticism from analysts that it has failed to make decisive moves into rapidly expanding markets such as the internet. Wall Street rumors suggest that AT&T has missed several major merger opportunities because Allen felt that he shouldn’t start negotiations that he couldn’t conclude. AT&T also faced problems because of fears that the internal favorite for the job – lawyer John Zeglis – might quit the company if he was passed over. But big investors gave Zeglis the thumbs down because of his lack of experience and he will get the consolation prize of being appointed president and chief operating officer where he will be able to work in partnership with Armstrong. The danger now is that with huge battles under way for control of MCI Corp and other deals mooted, Armstrong will hardly have time to get his feet under the boardroom table before he needs to make tough decisions about what role AT&T will play in the wave of alliances now sweeping world telecommunications.