CEO Takes Over Telecom Giant AT&T
By The Associated Press
New York Times
Sunday, June 3, 2007
SAN ANTONIO (AP) -- After an acquisition binge that transformed
the smallest Baby Bell into a telecommunications heavyweight,
AT&T Inc. is undergoing another change Sunday: a new chief
Randall Stephenson, 47, rose through the ranks of AT&T and
previously served as its chief financial officer and chief
operating officer. He is credited with helping position the
company so it could afford the buying spree that turned it into
the nation's largest provider of traditional phone, wireless and
Stephenson takes over for Edward Whitacre Jr. in time for what
might be the most hyped telecommunications device launch in a
generation, Apple Inc.'s iPhone. AT&T -- whose wireless division
was formerly known as Cingular -- will be the exclusive carrier
for the combination cell phone, portable music player and Web
device when it launches in the U.S. later this month.
''Whatever your expectations are from this device, they are
probably too low,'' Stephenson said in a recent interview. ''It
changes how we think about the PDA (personal digital assistant),
the iPod and the cell phone interacting.''
More than 1 million people have signed up through AT&T's Web
site for a call when the iPhone becomes available, Stephenson
said. It will be available in two models, priced at $499 or
It's not clear how many of the devices will be available at
launch, but Stephenson said, ''I'll be really disappointed if
there's not a shortage.''
AT&T plans to grow through wireless, using that business segment
to drive sales of its traditional phone, high-speed Internet and
''The company is going to be positioned as a wireless-centered
company,'' Stephenson said. ''Once you have mom and dad and the
kids on wireless, then you get them on broadband and
He said he doesn't plan major departures from the path San
Antonio-based AT&T is following, after takeovers of BellSouth
Corp., the Cingular Wireless business and the AT&T long-distance
business. The BellSouth acquisition gave it full control of
Most of the major consolidation in the telecommunications
business is done, he said.
''No hard left or right turns. We've set the direction of this
business over the last two to three years,'' he said.
AT&T's stock has been trading at five-year highs, but despite
the excitement around the iPhone, Stephenson still faces
He'll have to finish the integration of BellSouth, an $86
billion purchase, and the AT&T long-distance business, bought
for $16 billion in 2005, while trying to grow revenue in a
wireless business that's facing heavy competition.
More competition will continue to come from cable, which is
selling phone service along with TV and Internet. AT&T has
responded with its U-verse television service, though the
rollout has been slow and it won't be available in any of the
old BellSouth territory until later this year.
Analysts say the rapid, wide-scale changes in the
telecommunications business give Stephenson the reins of a
company vastly different from the one run by Whitacre.
''It's not the same marketplace,'' said industry analyst Jeff
Kagan, noting the 1984 breakup of the old AT&T Corp. -- Ma Bell
-- was followed by an avalanche of new competitors and then
consolidation. ''He's inheriting a company that is a
brilliantly put together company, and it's very profitable. But
they're going into head-to-head competition with new companies
that are also very profitable and very strong.''
Kent Custer, an analyst for A.G. Edwards & Sons, said
Stephenson, who began at Southwestern Bell in 1982, eventually
rising to chief financial officer in 2001, has long been an
influential force at AT&T. He became the chief operating
officer of the company, then called SBC Communications, in 2004.
Since that time, the company has better positioned itself for
growth, Custer said.
Traditional phone service remains under attack from wireless
carriers and cable competition, but ''generally, the business is
in better standing than it was two or three years ago,'' he
Stephenson will have big shoes to fill. Whitacre, an executive
who pushed change and managed deals others thought wouldn't get
done, was an enormous force in the telecommunications business
during his 17 years at the helm of AT&T.
''I've learned a lot from him,'' Stephenson said. ''If you want
to move the needle in this business, you have to think big.''
Whitacre, a famously blunt Texan, offered Stephenson one piece
of advice after the executive change was announced. It came in
a text message: ''Give em hell.''
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