Randall Stephenson has assumed charge of Chairman and Chief Executive Officer of telecommunications giant AT&T, Inc. replacing Edward Whitacre, Jr. The 47-year-old Stephenson is considered an old hand with the San Antonio based AT&T, having served as Chief Financial Officer in the past and in great part responsible for positioning the company to facilitate takeovers that make it the giant it is today. After assuming charge, Stephenson indicated that the largest US phone company may buy overseas assets or technology companies to boost its corporate and international sales.
AT&T has said in its statement that it would spend $750 million over the next two years to improve its global infrastructure, including undersea cables and advanced networks. Stephenson further revealed that AT&T may also seek deals similar to its 2006 acquisition of privately held applications service provider USinternetworking Inc. for $300 million. However, he preferred to remain shut over the question whether the firm would move to buy a bigger company like Vodafone.
A speedy study with a remarkable understanding of the company’s operating and financial data, Stephenson climbed high rapidly through the phone company ranks. After a sequence of financial positions, including an assignment in Mexico City, Stephenson became chief financial officer in 2000, supervising an impressive effort to reduce the company’s debt from $30 billion to close to zero. One of his strategies was throwing out the greater part of the company’s overseas holdings in an instant series of deals that brought in about $10 billion in cash.
Stephenson takes over the post in time for what might be the most puffed up telecommunications gadget launch in a generation, Apple Inc.’s iPhone. AT&T, whose wireless branch was formerly known as Cingular, will be the exclusive carrier for the combination of cell phone, portable music player and Web device when it launches in the US later this month. AT&T is planning to grow mainly now through wireless, using that business segment to propel sales of its traditional phone, high-speed Internet and other services.
This time around, the firm is in desperate need to increase revenues as it continues to lose traditional phone lines, once the mainstay of its business, in the hands of competition from cable, wireless and the Internet. Experts are of the view that with few US telecom companies left to buy, Stephenson will be required to improve sales by winning subscribers from other companies and persuading its existing customers to purchase more services.
AT&T has also decided to spend some $5 billion to advance its network so it can offer video and better compete with cable companies that are snatching its phone customers. Up to now, the telecom firm has already signed up 30,000 customers for its cablelike TV service named U-verse. However, analysts question how effectively its network, still largely composed of old copper wires, can deliver video.
Taking consideration the prevailing conditions Stephenson would probably stick to Whitacre’s management style rather straying away. Some analysts are of the view that the firm may be less acquisitive after so many big deals and huge spending on U-Verse, which is AT&T’s response to cable’s all-in-one packages of Internet, television and phone services.
