Randall Stephenson does whatever it takes to keep AT&T on top of its game

Randall Stephenson saw the proposed merger of AT&T Inc. and T-Mobile USA Inc. back in 2011 as a transformational deal. He believes it could have provided AT&T with the additional network capacity it needed to keep raising the bar on the level of service available to consumers.

“It was a really, really significant deal,” says Stephenson, the chairman and CEO at AT&T. “We spent a lot of time with the board, brought the board up to speed and told the board that this was not a layup. It had the potential to fall apart, but we felt like it was a deal that ought to be done. And we pulled the trigger on it.”

Soon after, however, the U.S. Department of Justice intervened and filed an antitrust lawsuit against AT&T. Stephenson thought he could win a court battle, but he says he never got the chance to prove it and ended up walking away from the transaction.

“What I miscalculated was the extent to which our government would go to keep it out of the courts,” Stephenson said, speaking last November during a live panel discussion at the EY Strategic Growth Forum in Palm Springs, California.

Stephenson recalled a piece of advice he received from his father, who was a serial entrepreneur.

“He told me one time that if you never fail big, you will live your life being fearful of failing,” Stephenson says. “And until you fail, you’re always afraid to take the risk that will put you in a different place.”

An ‘elegant’ transition

Stephenson became chairman at AT&T in 2007 and has helped it become one of the world’s largest telecom organizations with $129 billion in revenue every year. In the past six years, AT&T has invested more in the U.S. than any other company.

Stephenson says his experience in virtually every part of AT&T plays a big part in his success as its leader.

“I’m one of those guys who takes a job apart and puts it back together and when I put it back together, it takes a lot fewer people to do it than when I took it over,” Stephenson says. “I just went through a series of these and I find myself — it was like over five years, every time I would get something fixed, they would throw me into another mess.”

The man putting him in these tough spots, his predecessor, Edward Whitacre, Jr., was testing his mettle to be the company’s next CEO, along with a few other talented leaders. Stephenson came out on top.

“And then over a three-year period of time after he told me that the job was going to be mine, he didn’t tell anybody else,” Stephenson says. “I began to put my people in place over a three-year period of time. So at the point in time when he announced, ‘Adios, I’m out of here,’ my people moved immediately into their roles and I had my team in place from day one. It was the most elegant process I could imagine. I will always be indebted to Ed for how he did that.”

Keep pushing ahead

AT&T has more than 253,000 employees and it takes a strong leadership team to make sure people at every level of the organization understand their role in the company’s success. Stephenson says he tries to think of all those employees in every decision he and his team make.

“I have a philosophy in business and that is whatever hard decision you have to make, you’ve got to go stand in front of the mirror, look yourself in the eye and say, ‘What is the right thing to do?’” he says.

He adds that it’s not just about morals, nor is it just about you as the leader. You need people on your team who have the strength and fortitude to make the hard decision when the moment arrives for them as well.

“Are these people who can make that tough call?” Stephenson says.

Stephenson recalls the decision to push wireless technology in that segment’s infancy, a move which “cannibalized the devil out of our fixed line business”, but obviously proved to be the right move.

“I tell my people this all the time,” Stephenson says. “If we don’t disrupt ourselves, somebody will be glad to disrupt us for ourselves. And so you’ve just got to have the discipline to keep pushing, pushing, pushing.”

How to reach: AT&T, (210) 821-4105 or www.att.com.

AT&T to boost spending to $22 billion a year for three years

DALLAS, Wed Nov 7, 2012 – AT&T Inc. will increase capital spending by as much as 16 percent to $22 billion a year for the next three years to fund upgrades to its wireless and wireline networks, the company said on Wednesday, sending its shares down more than 3 percent.

AT&T needs to invest to compete with Verizon Communications Inc., which is ahead in its wireless network upgrade, and to take advantage of emerging businesses such as cars with built-in wireless Internet connections.

AT&T said it decided to upgrade its wireline network as other options such as carving off the wireline business or divesting parts of the network were not as attractive financially. It previously said it was considering selling some rural phone lines.

“This gives us the opportunity to improve our top line growth and change our cost structure,” CEO Randall Stephenson told analysts at an AT&T event in New York.

AT&T says iPhone 5 fastest-selling iPhone ever

SAN ANTONIO, Texas, Mon Sep 17, 2012 – AT&T, the No. 2 U.S. mobile service provider, said it set a sales record with Apple’s iPhone 5 over the weekend, making it the fastest-selling iPhone the company has ever offered.

AT&T did not disclose how many iPhones it sold, but said the iPhone 5 was still available for preorder and would go on sale from Sept. 21 at AT&T retail stores.

It is not unusual for Apple products to sell out the first day. Orders for the previous iPhone 4S, the last product the company introduced before the death of co-founder Steve Jobs, surpassed 1 million in the first 24 hours, beating Apple’s previous one-day record of 600,000 sales for the iPhone 4.

Apple’s U.S. store, at www.apple.com, on Monday morning showed pre-orders for the iPhone 5 would take 2-3 weeks to ship.

The phone’s other carriers, Verizon Communications Inc. and Sprint Nextel Corp., also showed similar delays in shipping the phone.

The company began taking orders for the iPhone 5 at midnight Pacific Time (0700 GMT) on Sept. 14, but shipping dates for the slimmer and faster smartphone slipped by a week within an hour of the start of pre-orders.

AT&T making big investment in home monitoring

NEW YORK, Mon May 7, 2012 – AT&T Inc. is making a big investment in a nationwide wireless home monitoring service that could potentially add $1 billion to its annual revenue as part of the No.2 U.S. mobile operator’s ongoing effort to expand beyond cell phones.

It is planning a service called “Digital Life” to monitor homes for everything from water damage to burglaries and to let customers remotely do things like adjust temperature or unlock doors, using an Internet connection.

The service, of which AT&T will start trials this year, involves sensors and cameras linked to a central home system that connects wirelessly to AT&T monitoring centers, said Glenn Lurie, the AT&T executive spearheading the project.

Lurie said, in an interview with Reuters ahead of the CTIA wireless show in New Orleans, where AT&T will announce the plan Monday, that AT&T is hiring “lots of people” to support the service.

He did not want to set a specific revenue target for the business but said he sees it as one of AT&T’s largest revenue growth opportunities, “if not the largest,” with “very significant” incremental growth” in 2013.

“When you’re a company like AT&T … you look at opportunities that are billion-dollar opportunities,” Lurie said. “Obviously to grow our business at any level, when you’re a $130 billion plus company, you have to look for significant opportunities. We view this as a significant opportunity.”

Lurie, who has already grown AT&T’s emerging-device services into a $1 billion business, said the industry is ripe for growth, as only 20 percent of U.S. homes have security systems.

AT&T quarterly profit rises, helped by wireless margins

DALLAS, Tue Apr 24, 2012 – AT&T Inc. reported a higher quarterly profit, driven by a rise in wireless margins, as it had to shell out less in subsidies to Apple Inc. because it sold fewer iPhones in the quarter.

Its shares rose almost 2 percent after the news.

AT&T and its rivals had been weighed down by iPhone costs in fourth quarter, when the latest iPhone was launched. While fewer iPhone sales meant weaker subscriber growth for AT&T, it did help the company’s wireless service profitability.

In the first quarter AT&T’s wireless margin rose to 41.6 percent based on earnings before interest, tax, depreciation and amortizing, from 28.7 percent in the fourth quarter and 39 percent in the year-ago quarter.

Its net income rose to $3.58 billion, or 60 cents per share, from $3.4 billion, or 57 cents per share in the year-ago quarter. Consolidated revenue rose nearly 2 percent to $31.8 billion from $31.25 billion.

The No. 2 U.S. mobile provider added 187,000 subscribers in the quarter, compared with expectations for 193,000 from six analysts surveyed by Reuters. This was much fewer than its bigger rival, Verizon Wireless, which reported 501,000 net additions last week.

AT&T shares rose to $31.15 in premarket trade after closing at $30.61 on Monday on the New York Stock Exchange.

AT&T to sell Yellow Pages 53 percent stake to Cerberus

DALLAS, Mon Apr 9, 2012 – AT&T Inc. said on Monday it would sell a 53 percent stake in its Yellow Pages business to private equity firm Cerberus Capital Management LP, which will pay AT&T $750 million in cash and take on $200 million in debt.

AT&T had said in January that it would consider selling the dwindling business, which generated about $3.3 billion in revenue in 2011. After the deal the telephone directory business will honor existing union contracts, the company said.

AT&T said it expects the deal to have a minimal effect on 2012 earnings and does not expect a material gain or loss.

Department of Justice to seek delay or dismissal in AT&T trial

WASHINGTON ― The U.S. Justice Department said on Friday it would seek to stay or dismiss its lawsuit to stop AT&T Inc’s purchase of T-Mobile USA because AT&T withdrew its application with the Federal Communications Commission, which must approve the deal.

AT&T and Deutsche Telekom’s T-Mobile said in November that they had withdrawn the filing with the FCC to focus on the Justice Department’s antitrust challenge to the acquisition, valued at $39 billion.

“It’s not a real transaction until they file with the FCC,” Joseph Wayland, the Department of Justice’s lead attorney in the case, told Judge Ellen Huvelle.

AT&T’s attorney Mark Hansen sought to reassure Judge Huvelle that the transaction remained the same despite reports that the company could renegotiate the deal to make it more acceptable to regulators.

The Justice Department and FCC have said the merger would crimp competition. AT&T is the second-largest U.S. cellphone company and T-Mobile USA is the fourth largest.

The Justice Department sued to block the deal in August. That case is due to go to trial in February.

U.S. FCC to allow AT&T-T-Mobile merger application withdrawal

WASHINGTON ― U.S. communications regulators released a staff report criticizing AT&T Inc’s. $39 billion plan to purchase T-Mobile USA, even though they agreed on Tuesday to let the companies withdraw their request for approval.

AT&T and T-Mobile USA owner Deutsche Telekom AG said last week they wanted to withdraw their application with the Federal Communications Commission to focus on defending the transaction from an antitrust lawsuit brought by the U.S. Justice Department.

The FCC released on Tuesday an FCC staff report that found the touted benefits of the transaction do not outweigh the competitive disadvantages.

FCC officials cited staff findings that the deal would significantly diminish competition and lead to massive job losses.

The staff report also concluded the merger would not result in significantly more build-out of next generation 4G wireless service than would occur absent the transaction.

AT&T called the FCC’s decision to release the report “troubling.”

“It is simply a staff draft that raises questions of fact that were to be addressed in an administrative hearing, a hearing which will not now take place,” said Jim Cicconi, AT&T’s senior executive vice president of external and legislative affairs.

He added the report had not been made available to AT&T prior to the public release.

“We have had no opportunity to address or rebut its claims, which makes its release all the more improper,” he said.

AT&T has argued the deal will accelerate its expansion of high-speed wireless service to nearly all Americans and create jobs.

An antitrust expert with telecommunications experience expected the report would be troubling for AT&T during its court battle.

Public interest groups had urged the FCC to release the report, saying it likely came to conclusions AT&T would rather have kept quiet.

The FCC said the companies were free to come back to the commission with a new application.

FCC Chairman Julius Genachowski said the agency’s review has been focused on “fostering a competitive market that drives innovation, promotes investment, encourages job creation and protects consumers.

“These goals will remain the focus if any future merger application is filed,” he added.

The Justice Department went to court in August to oppose AT&T’s takeover of T-Mobile on antitrust grounds. A trial in that case is due to begin on Feb. 13.

What’s next for AT&T deal? Possible sale of 40 percent of T-Mobile assets

NEW YORK ― AT&T and T-Mobile’s corporate parent, Deutsche Telekom, acknowledged that an acquisition deal was in trouble in a Thanksgiving Day announcement. The companies said they had withdrawn, for now, their application to the Federal Communications Commission to join their cell phone operations. They also said that AT&T would take a $4 billion charge against earnings — the amount in breakup fees owed to Deutsche Telekom if the deal is scrapped.

The companies portrayed the withdrawal of the FCC application as a tactical move, after the commission chairman said earlier in the week that he would move to oppose the deal. The Justice Department filed an antitrust suit to block the merger in August.

Focusing on the antitrust trial, scheduled for February, the companies explained, would now be the first step. They vowed to continue to pursue their bold plan to combine the second- and fourth-largest cell phone carriers in the United States.

But the companies’ ambitions must be scaled back if they want any chance at a deal, analysts say. To address the objections of the Justice Department and FCC that a merger would be anticompetitive, AT&T could agree to sell off 40 percent or so T-Mobile’s assets to wireless rivals, they say.

The policy goal, analysts say, would be to strengthen wireless competitors beyond the big two, Verizon Wireless and AT&T. So sales of mobile spectrum, cell towers and customers could not be made to Verizon, but to others, like Sprint and MetroPCS, the third- and fifth-largest carriers.

Or perhaps assets could be sold to a well-heeled foreign company that, unlike Deutsche Telekom, is increasing its investment in the United States: América Móvil, headed by the Mexican billionaire Carlos Slim Helú. Slim is a major shareholder in The New York Times Co.

Creative deal-making, analysts note, would be required to forge alliances and supply cash for spinoff purchases. The list of potential participants, they say, includes private equity firms, like SilverLake Partners, and cable companies, like Comcast and Time Warner, which own spectrum and whose Wi-Fi networks can work in tandem with cell networks.

Each of the options would present obstacles. And it is not clear that AT&T would be interested in a drastically scaled-down deal. Yet the company has consistently argued that its main motivation for pursuing T-Mobile is to acquire scarce wireless spectrum, so AT&T can quickly build out high-speed, next-generation network capacity to improve its service.

“If that is its goal, then AT&T has to explore ways to salvage as much spectrum out of the deal as it can,” said Kevin Werbach, an associate professor at the Wharton School of the University of Pennsylvania and a former technology policy official at the FCC.

FCC chief seeks added review of AT&T/T-Mobile deal

WASHINGTON ― AT&T Inc was dealt a blow Tuesday as the top U.S. communications regulator sought to have its planned $39 billion purchase of T-Mobile USA sent to an administrative law judge for review.

Federal Communications Commission Chairman Julius Genachowski sent a draft order to his fellow commissioners, citing FCC staff findings that the deal would significantly diminish competition and lead to massive job losses.

“The record clearly shows that — in no uncertain terms — this merger would result in a massive loss of U.S. jobs and investment,” a senior FCC official said.

The agency also concluded that the merger would not result in significantly more buildout of next generation 4G wireless service than would occur absent the transaction.

AT&T argues the deal will accelerate its expansion of high-speed wireless service to nearly all Americans.

The U.S. Justice Department went to court in August to oppose AT&T’s purchase of T-Mobile from Deutsche Telekom AG on antitrust grounds. A trial in that case is due to begin on Feb. 13.

Any administrative hearing at the FCC, which is charged with evaluating the public interest merits of the deal, would begin after the antitrust trial, an FCC official said.

AT&T called the FCC action “disappointing” and disputed the agency’s conclusion that its T-Mobile deal, with $8 billion in broadband investment and commitments on job preservation and enhancement, would result in the loss of jobs and investment.

The FCC recently said its $4.5 billion annual fund to promote broadband to underserved communities would create 500,000 jobs over the next six years.

“This notion, that when government spends money on broadband it creates jobs, but when a private company spends money it doesn’t, is clearly wrong on its face,” said Jim Cicconi, AT&T’s top executive for external and legislative affairs.