With its executive reshuffling this week AT&T(s T) returned to a structure that more accurately reflects where its businesses are heading: mobile. The wireless division juggernaut that drives most of AT&T’s revenues is now firmly in the hands of former consumer CEO Ralph de la Vega, who is giving up his U-Verse responsibilities to the new head of AT&T Business and Home Solutions Andy Geisse. It’s a smart move considering how ridiculous it was for AT&T to lump consumer wireless and wireline together in the first place.
I say that because AT&T is a nationwide wireless operator with a Baby Bell operating territory, covering Southwestern Bell, BellSouth, PacBell and Ameritechs’ old turf. Those wireless and wireline footprints overlap but it’s hard to run a nationwide strategy when a significant part of your business is not only a regional operation, but a shrinking regional operation at that. De la Vega was in the odd position of trying to get residential customers to hold onto their phone lines while simultaneously selling them huge buckets of mobile minutes.
AT&T tried to combine those consumer businesses in the first place because of a now-dead vision of a world of “three screens”. It wanted to interlink the services it offered to the PC (through DSL), the TV (through U-Verse) and the mobile phone. It sounds like a neat idea, but the vision never took off. Except for the cursory U-Verse smartphone app and the glue of a unified monthly bill, AT&T’s mobile services have remained distinct from its wireline ones. AT&T ditched its ‘three screens’ advertising long ago and now it appears to have ditched the strategy as well.
The move leaves de la Vega to focus solely on AT&T’s huge-growth wireless business, and he will have plenty to keep him busy. AT&T has the industry’s largest base of iPhone(s aapl) and overall smartphone subscribers, all of which are placing pressure enormous pressure on its 3G and 4G networks. De la Vega, along with newly promoted SVP of technology and network operations John Donovan, will also oversee AT&T nationwide launch of LTE, in hopes of catching up to arch-competitor Verizon Wireless(s vz)(s vod).
De la Vega apparently won’t have to deal with the task of finding new spectrum though. That job now falls to John Stankey, who will give up his title as CEO of business operations to assume the mantle of Group President and Chief Strategy Officer. AT&T is looking to grow its airwave holdings, and to do so it’s had no qualms with attacking the people that stand between it and the frequencies it so desires. Stankey is well respected throughout the telecom industry, and he has elaborated, quite reasonably and eloquently, in the past on the evolution of wireless networking and the need for spectrum to meet growing mobile data demands.
I’m a bit worried that eloquence and reason will now fall to the wayside. To overcome objections to AT&T’s consolidation ambitions, the carrier needs to unleash a bulldog on its regulators and critics – a role that until now has been filled by CEO Randall Stephenson. It looks like that bulldog will now have to be John Stankey.