March 25 (Bloomberg) -- AT&T Inc., the biggest U.S. phone company, named former VeriSign Inc. executive John Donovan as chief technology officer to oversee research and network upgrades.

Donovan will report to John Stankey, who oversees the land- line business, AT&T spokeswoman Jeannie Hornung said. He previously oversaw sales, operations, customer service and product development at Internet-directory manager VeriSign.

AT&T is spending $7 billion over five years to upgrade its network to handle television signals and faster Internet speeds. The San Antonio-based company also set aside $1 billion this year to improve its global network, aiming to offer multinational clients Web services such as videoconferencing and data storage.

Donovan joined VeriSign in 2006 as part of the acquisition of InCode Wireless, where he was chief executive officer. He stepped down from the board of NII Holdings Inc., the provider of wireless services in Latin America, because of his new position with AT&T, according to a regulatory filing.

AT&T fell 3 cents to $38 at 4 p.m. in New York Stock Exchange composite trading. The shares have dropped 8.6 percent this year.

Donovan replaces Chris Rice, who has moved to a new job at the company as an executive vice president in charge of implementing changes to the network to offer new services, AT&T spokesman Fletcher Cook said. Rice will still report to Stankey.

To contact the reporter on this story: Crayton Harrison in Dallas at tharrison5@bloomberg.net

Last Updated: March 25, 2008 16:14 EDT