Executive Q&A with Randall Stephenson

By Jim Stafford

Published: October 28, 2007

Randall Stephenson played it for laughs last week when he confessed to a packed meeting of the Downtown Rotary Club that his brother helped him get a job with Southwestern Bell Telephone Co. 25 years ago.

"I got my job the old fashioned way, just as I suspect many of you did: My brother got me the job,” said the chairman and chief executive of AT&T Inc., which is the telecommunications giant that Southwestern Bell morphed into after two decades of expansion and acquisitions.

The Rotary audience erupted in laughter at what Stephenson later claimed to be a true story.

AT&T's chief executive is an Oklahoma City native and a graduate of Moore High School. Stephenson graduated with accounting degrees from what was then Central State University and the University of Oklahoma before launching his career in Oklahoma City with Southwestern Bell.

Southwestern Bell eventually became SBC and then AT&T as it acquired competitors and eventually its former parent company.

Stephenson's career advanced as the company grew and expanded from its regional focus. He helped build a wireless subsidiary in Mexico City that eventually became known as American Movil. He then was named SBC's controller in 1996.

Stephenson was named SBC's senior executive vice president and chief financial officer before becoming chief operating officer in 2004. He continued in that position after the company's acquisition of AT&T in November 2005 and BellSouth in December 2006.

Stephenson became AT&T's chairman and chief executive in June upon the retirement of longtime Chief Executive Ed Whitacre.

Despite the laughter that Stephenson's story of his hiring in 1982 by Southwestern Bell drew from the Rotarians, he insisted it was true. His brother, Kevin, worked for the company in Oklahoma City as a records clerk in the accounting office at the time and was instrumental in Stephenson's hiring.

"He got me the job,” Randall Stephenson said. "Man, I was needing work. My wife and I were getting married, and I said, ‘I need a job.'”

Today, Kevin Stephenson is a customer services technician in Norman.

After speaking to the Rotary Club, Stephenson discussed issues facing AT&T and the communications industry with The Oklahoman. Here are excerpts of that conversation:

Q: How have your Oklahoma roots influenced your career with AT&T?

A: It's interesting. I will tell you when you look at how I recruit and look at the people who are around me at my table, the executives, they tend to be — not all — Midwestern. We just have a lot of success with people who come up from this area. We don't have a lot of Ivy Leaguers. Look at my predecessor, Ed Whitacre, a Texas Tech grad from Ennis, Texas. I think growing up in Oklahoma you establish a good hard work ethic. People around here are pretty darned independent, right? Entrepreneurial spirit. My dad was the entrepreneur's entrepreneur. He went bankrupt during the oil crunch, and (I) sort of watched him scraggle to make a living, doing miscellaneous things.

Q: The release of the iPhone at the end of June has created lots of excitement for AT&T and Apple Inc. How has that experience been for AT&T?

A: The experience with Apple has been great. Bringing a product like that to market, you don't do that in six months. We started that two years ago. It's been an extensive effort with Apple to get that product to market. The integration, the coordination, to bring all that together, it's hard. We brought that to market June 29 and we have had great success with it. We have sold 1.1 million (iPhones) that we have actually activated. But I will tell you a thing it has done that is more important than anything. We rebranded Cingular as AT&T this year, and made a concerted effort to ensure that iPhone was launched under the AT&T brand. By doing that we have effectively rebranded our wireless company as AT&T. I went to India this summer and was introduced as the chief executive officer of AT&T. We had no wireless service a month ago, and the first thing that everyone in India asked me was ‘do you have an iPhone?' So, it accomplished its purpose, right?

Q: Wall Street Journal technology writer Walt Mossberg recently took the wireless industry to task, saying that the big players like AT&T act as "Soviet ministers” to protect a bad system that limits choice and technologies for U.S. consumers. How do you respond to that charge?

A: Walt Mossberg made another statement that the U.S. wireless industry is the ‘laughingstock of the world.' What Walt Mossberg didn't tell you is that the handset selection in the U.S. is dramatically more than what you would find in Europe. The cost of a telephone call in the U.S. is a third of what it is in Europe. I think in 90 percent-plus of the United States you have a choice of four competitors. By any measure you want to establish in terms of competitive environment, price of service, selection of handsets and services, contract terms, United States hands-down is probably the best you are going to find in the world. I would challenge Mr. Mossberg to tell me which country is doing better.

Q: You rolled out your U-verse television service at the first of the year. Have you been pleased with the progress it has made in terms of performance and subscriber growth?

A: The performance has met expectations. The growth, I want it to go faster; the build is taking longer than I would like. We hit 126,000 subscribers in the third quarter, and coming from a flat-footed start at the beginning of the year, I shouldn't complain. That's pretty impressive growth, I think. But we need to go faster. We're trying to accelerate and get into more markets. We're in 33 markets today and we will launch in at least one new market a month for the rest of the year. We're trying to be patient, but we need to go faster.

Q: Why has AT&T opposed "net neutrality” in favor of a tiered Internet user system that would charge senders of big amounts of data higher fees?

A: I have never said that's what we want. I have said one statement consistently and regularly and that is ‘don't regulate the Internet.' You are seeing unprecedented investment come into Internet technology today. I don't know if you know it or not, our Internet backbone, one of the largest in the world, we are completely replacing it with a whole different level of capacity worldwide. We're investing aggressively, $18.5 billion a year. If you want to see that investment slow there is a recipe for that, regulate it. I've always said don't regulate something that's not broken. If somebody does something wrong, address that particular company and that circumstance. But don't take on regulations on rumored, anticipated, estimated or approximated problems.

Q: What hobbies or interests do you pursue when you aren't working?

A: I play a really bad game of golf. I like to fish. I love to bass fish. We do a lot of skiing, my family and I. It's one way of getting my girls to come around — take them skiing.

Q: It's the first Saturday in October and you are in the Cotton Bowl. For whom are you cheering, OU or Texas?

A: I'm a Texan; I'm a Texas resident, citizen, right? I pay taxes in Texas. At the AT&T Red River Shootout, I unabashedly root for the University of Oklahoma. My heart belongs to Oklahoma.

Q: OK, what magazine do you pick up first, Sports Illustrated or The Economist?

A: What day and what time? If it was Saturday morning, the Economist. If it were 11 o'clock at night, probably Sports Illustrated.

Comments