Post by dubyakayel on Mar 20, 2011 19:19:48 GMT -5
When it comes to running AT&T Inc. (T), Chief Executive Randall Stephenson isn't afraid to make the high-stakes wager, and his $39 billion bid to acquire T-Mobile USA from Deutsche Telekom AG (DTEGY) marks his boldest--and riskiest--bet yet.
Stephenson learned the power of the big deal from his predecessor, Edward Whitacre, who made 14 mergers between 1990 and 2007, transforming AT&T into the world's largest telecom company by revenue and market capitalization by the time he left.
But the T-Mobile agreement--Stephenson's first megadeal as CEO of AT&T--is only the latest in a number of bets made during his roughly four years. Throughout his tenure, Stephenson has worked to shift the company away from its traditional copper-based landline heritage, which dates back to Alexander Graham Bell, and into faster growing areas of wireless and video.
While Whitacre aimed to rebuild the old Ma Bell phone giant, Stephenson has generally preferred to make strategic moves based on technology, devices and services. For example, Stephenson likes testing out the latest gadgets, holds meetings on Cisco Systems Inc.'s high-end teleconferencing system, and had his staff create a custom iPhone application to read financial reports.
Appropriately, Stephenson's most critical deal was his decision to back Apple Inc. (AAPL), which previously had no experience in the wireless business, with a major financial agreement that locked up the iPhone with AT&T until earlier this year. The deal required billions of dollars in subsidies to Apple, but it resulted in millions of subscribers flocking to his carrier.
"If there's been a relatively limited number of deals, he is a guy who is willing to make a big bet when he thinks it's warranted," said Craig Moffett, analyst at Sanford C. Bernstein & Co. LLC. In just Stephenson's first two years as CEO, AT&T made $18.8 billion in acquisitions of radio spectrum--addressing a key issue early on--as well as smaller cellphone companies.
He also championed the use of relatively new Internet-based technology to power AT&T's U-Verse television service at a time when rival Verizon Communications Inc. was pushing forward with its own bold plan to upgrade its network. The decision resulted in early hiccups with Microsoft Corp. (MSFT), which developed the platform for U-Verse, but has more recently paid off with continued growth in its video business.
Even his latest deal to buy T-Mobile USA is rooted in technology. AT&T said it pursued the deals as way to address the looming capacity crunch facing the wireless industry, as data usage continues to explode.
"We as a company have to think differently to address the demands," Stephenson said.
The deal also furthers Stephenson's vision of transforming AT&T, with 80% of the combined company's revenue coming from its faster-growing wireless business.
The company looks dramatically different than when Stephenson joined its information-technology department in 1982, when it was then known as Southwestern Bell Telephone. He spent most of his career overseeing telecom finances in various capacities, and worked in the company's Mexico operations, where he befriended telecom titan Carlos Slim Helu.
In 1996, he was promoted to controller, and eventually, to chief financial officer, where he reduced the company's net debt from $30 billion to nearly zero by 2004, positioning the company for future takeovers. That year, he was promoted to chief operating officer, where he was slowly groomed to take over from Whitacre.
Stephenson has a reputation at AT&T for being a financial whiz focused on the details. He is known to review every angle of a deal before committing to it, according to a person who has worked with him.
It's that keen thinking that many are banking on to get this combination approved by government regulators. Analysts believe AT&T and Deutsche Telekom will have a tough time selling the deal to an administration that has traditionally been reluctant to approve major mergers. Consumer groups have already rallied to criticize the deal as a concentration of power.
Analysts, however, warn against betting against Stephenson and his company.
"AT&T's regulatory team is the best in the business," Moffett said. "For them to even suggest that this deal can get done means you have to take seriously it has some possibility."
online.wsj.com/article/BT-CO-20110320-703041.html
For those of you interested in the business of information technology firms.
Stephenson learned the power of the big deal from his predecessor, Edward Whitacre, who made 14 mergers between 1990 and 2007, transforming AT&T into the world's largest telecom company by revenue and market capitalization by the time he left.
But the T-Mobile agreement--Stephenson's first megadeal as CEO of AT&T--is only the latest in a number of bets made during his roughly four years. Throughout his tenure, Stephenson has worked to shift the company away from its traditional copper-based landline heritage, which dates back to Alexander Graham Bell, and into faster growing areas of wireless and video.
While Whitacre aimed to rebuild the old Ma Bell phone giant, Stephenson has generally preferred to make strategic moves based on technology, devices and services. For example, Stephenson likes testing out the latest gadgets, holds meetings on Cisco Systems Inc.'s high-end teleconferencing system, and had his staff create a custom iPhone application to read financial reports.
Appropriately, Stephenson's most critical deal was his decision to back Apple Inc. (AAPL), which previously had no experience in the wireless business, with a major financial agreement that locked up the iPhone with AT&T until earlier this year. The deal required billions of dollars in subsidies to Apple, but it resulted in millions of subscribers flocking to his carrier.
"If there's been a relatively limited number of deals, he is a guy who is willing to make a big bet when he thinks it's warranted," said Craig Moffett, analyst at Sanford C. Bernstein & Co. LLC. In just Stephenson's first two years as CEO, AT&T made $18.8 billion in acquisitions of radio spectrum--addressing a key issue early on--as well as smaller cellphone companies.
He also championed the use of relatively new Internet-based technology to power AT&T's U-Verse television service at a time when rival Verizon Communications Inc. was pushing forward with its own bold plan to upgrade its network. The decision resulted in early hiccups with Microsoft Corp. (MSFT), which developed the platform for U-Verse, but has more recently paid off with continued growth in its video business.
Even his latest deal to buy T-Mobile USA is rooted in technology. AT&T said it pursued the deals as way to address the looming capacity crunch facing the wireless industry, as data usage continues to explode.
"We as a company have to think differently to address the demands," Stephenson said.
The deal also furthers Stephenson's vision of transforming AT&T, with 80% of the combined company's revenue coming from its faster-growing wireless business.
The company looks dramatically different than when Stephenson joined its information-technology department in 1982, when it was then known as Southwestern Bell Telephone. He spent most of his career overseeing telecom finances in various capacities, and worked in the company's Mexico operations, where he befriended telecom titan Carlos Slim Helu.
In 1996, he was promoted to controller, and eventually, to chief financial officer, where he reduced the company's net debt from $30 billion to nearly zero by 2004, positioning the company for future takeovers. That year, he was promoted to chief operating officer, where he was slowly groomed to take over from Whitacre.
Stephenson has a reputation at AT&T for being a financial whiz focused on the details. He is known to review every angle of a deal before committing to it, according to a person who has worked with him.
It's that keen thinking that many are banking on to get this combination approved by government regulators. Analysts believe AT&T and Deutsche Telekom will have a tough time selling the deal to an administration that has traditionally been reluctant to approve major mergers. Consumer groups have already rallied to criticize the deal as a concentration of power.
Analysts, however, warn against betting against Stephenson and his company.
"AT&T's regulatory team is the best in the business," Moffett said. "For them to even suggest that this deal can get done means you have to take seriously it has some possibility."
online.wsj.com/article/BT-CO-20110320-703041.html
For those of you interested in the business of information technology firms.