So as you may know, I am fortunate enough to attend Boston College’s Chief Executive Club meetings each month. Just for a quick refresher, the organization allows high-level individuals throughout the New England area to connect and share their ideas. It then culminates with a keynote speaker from a notable company, who covers his or her plans and general thoughts on the world. This time, we were joined by Randall Stephenson, the President and CEO of AT&T. Also in attendance was Abby Johnson, the President and CEO of Fidelity Investments, but I’d like to focus more on the former given the nature of his discussion. Stephenson delved into a wide array of topics that connect to our class, and I thought they would collectively make for an interesting blog post! To take us off hold, then (bad cell phone pun), let’s get started.
Corporate Mogul or Amiable Cowboy?
Similar to my first post, I feel that a brief introduction of Stephenson would help to convey his impact on the company: he began his career in 1982, working for an information systems business known as Southwestern Bell Telephone. This provided him with the knowledge and general wherewithal for navigating his industry, and he soon moved on to various leadership positions in technology-based finance. His bouncing around continued until about 2003, when he took over as Chairman of the Board of Directors for Cingular Wireless. President George Bush appointed him as the head of his Telecommunications Committee in 2004, and he was finally named CEO of AT&T in April 2007. With that all said, Stephenson clearly possesses the necessary experiences and skills for leading a company of this stature.
Yet, as a man born and raised in Oklahoma, he is certainly not your average billionaire – The Dallas resident speaks with a rich Southern accent and a calm disposition. He exudes the type of laid-back charisma that one would expect from an actor, rather than someone at the helm of a Fortune 100 institution. As further demonstration of this, Stephenson also serves as the National President of Boy Scouts for America, an organization for which he has simply always had an affinity. Such a unique persona has made him well-supported within the company and well-suited to take on stressful situations. It’s one of the main reasons why he has remained in the position for so long, and why he was deemed “CEO of the Year” by Chief Executive Magazine in 2016.
A Court Case for the Ages
From the likes of Uber and AirBnB, we have seen that one of the most pivotal traits for a CEO is his or her ability to deal with politics and regulation. Accordingly, for Randall Stephenson, that obstacle has taken the form of the United States Department of Justice. This comes as a result of AT&T’s decision to acquire Time Warner Inc., which the government considers a violation of antitrust laws. The DOJ has argued that such a large vertical merger would give too much power in too few hands, as AT&T would almost own the entirety of its supply chain. In turn, it has sued the company and set a trial date for March 19th (about three weeks from now).
In response to the litigation, however, Stephenson explained that it was about far more than power dynamics. Rather, he believes that a successful acquisition could completely revolutionize the way that we consume media. As the first significant change, a much higher amount of individuals would have access to a wider range of media options. Given that Time Warner owns CNN, HBO, Hulu, Bleacher Report, Turner Broadcasting, and Warner Bros. (among many others), AT&T could very easily increase their viewership across its global network. This would allow for a substantially more connected world and a greater sharing of important topics.
Secondly, the properties owned by Time Warner would bring an enormous amount of data to AT&T. New insights on consumer preferences, geographic usage, and spending habits could all be uncovered very quickly. From these findings, the company could then tailor and optimize its products for consumers. The benefits of that are two-fold: on the surface, members simply receive better services and more reasonable pricing. Going even deeper, though, AT&T can use its data to create extremely targeted and effective advertising. Consequently, people can be exposed to ads that they actually care about and have an interest in seeing. Moreover, if they’re successful enough, less advertising would be necessary altogether and more time can go towards real content. From these advantages, therefore, AT&T can considerably improve its users’ experience with media overall.
From a macro view of the case, Stephenson acknowledges that his company would become one of the largest in the world. AT&T would control an incredible quantity of assets, and that may scare or concern the entities around it. Yet, this deal would promote globalization and improve people’s lives in meaningful ways. It has benefits that other companies, such as Facebook and Google, could soon be looking to replicate for their users as well. To him, then, the pros of the acquisition clearly outweigh the cons, and he feels that a court of law would think the same. This is probably why, when asked about his thoughts on the case, he simply smiled and said, “I’m not too worried.”
The Next Generation
Moving outside of the legal world, AT&T is also readying for a different colossal move: the launch of 5G Networking. Stephenson broke down the various logistical and technological advancements that went into this process, but more importantly, he discussed what it would mean for users and why we should care about it.
On a very fundamental level, each network generation has functioned at a different altitude and frequency of air waves. 3G moved along the ground and around our knees, whereas 4G currently travels a little above our heads. However, neither of these situations are optimal given the amount of impediments at these elevations. People, trees, buildings, and other types of transmission waves are all examples of obstacles to go through. They can reduce the speed of one’s devices or even cut them off entirely (like when you go into the woods). The air itself is denser at these levels as well, which presents even more of a hindrance for 3G and 4G. Here to save us from these perils is 5G, which can exist at altitudes normally associated with planes. That means little to no obstructions, thinner air, and a drastically faster speed for all devices. But what does that actually imply for us and our society?
Well, in terms of immediate changes, our online connections will be exponentially better: navigating webpages, streaming music, and loading social media will all become effortless. Gone are the days of waiting for YouTube videos to buffer and watching Apple’s little rainbow circle endlessly spin around. Individuals in less-developed countries will have better access to the Internet, and those who already had it will be able to operate more efficiently. Abby Johnson of Fidelity was quick to emphasize the value that it would bring to her trading floors and understanding of markets.
Furthermore, many of the newest industries and innovations will rely on instant processing to function. Driverless cars, for instance, must be able to understand their surroundings immediately. In a similar vein, augmented reality platforms are only useful if they can interact with environments in real-time. Even artificial intelligence later on, like surgery-performing robots, will need to handle information right as it comes to them. Thus, by eliminating latency and delays, 5G will open the door for these elements to thrive and reach their true potential.
The new network should be fully rolled out by the end of 2018, and every single company that we have studied will clearly be affected (and improved) by it in some capacity. Put simply, as Stephenson himself described, “5G is a game-changer.”
So that sums up the bulk of our meeting! AT&T is clearly poised to change the world in a variety of ways, and I hope you found it as interesting to read as I did to hear.
We’ll have to wait a little longer to see the full effects of their court case and rolling out of 5G, but in the meantime, I’ve included a few links for anyone looking to learn more.
- More information on Stephenson: https://investors.att.com/corporate-governance/leadership
- An overview of the court case: http://money.cnn.com/2017/12/07/media/doj-att-trial-date/index.html
- Time Warner’s assets listed (simply because it’s so crazy): https://en.wikipedia.org/wiki/List_of_assets_owned_by_Time_Warner
- A further breakdown of 5G Networking: http://money.cnn.com/2018/01/29/technology/what-is-5g/index.html
Thanks for reading!