As competition heats up dramatically in the wireless industry, changes in the executive ranks are taking center stage.
Part of the reason for the changes is to prepare for greater potential competition from cable companies in the wireless realm, analysts said. Comcast is seeking federal regulatory approval to buy Time Warner Cable, and both companies are relentlessly building out millions of interconnected Wi-Fi hot zones to give wireless service to their customers across entire cities.
Another reason for the executive shifts is that AT&T and Verizon Wireless remain staunch competitors in a breakneck battle to be No. 1, with both focused on winning lucrative revenues from large business customers, analysts said.
Among a recent series of executive moves, AT&T on Tuesday announced that senior executive Ralph de la Vega has been named CEO of a newly combined Mobile & Business Solutions unit. De la Vega had previously been CEO of AT&T Mobility for seven years.
"Integrating Business Solutions into Mobility is a great fit, because mobility is how businesses do business," AT&T said in an emailed statement. "Business-related customers represent more than 50% of our mobile revenues, and it's growing. This new group will focus on delivering integrated solutions for business customers that are first and foremost mobile, and also secure, reliable, ultra-fast and effortless."
With de la Vega's expanded duties, AT&T also appointed Glenn Lurie as its new CEO of AT&T Mobility, where he will continue to report to de la Vega. Lurie has been president of emerging enterprises and partnerships under the Mobility unit, and had a major role in the creation of an AT&T home-monitoring service.
The recent CEO of AT&T Business Solutions, Andrew Geisse, is retiring after 33 years at the telecom. Geisse was the CIO at AT&T from 2004 to 2007, then executive vice president of AT&T Global Customer Service before moving becoming CEO of Business Solutions, which serves more than 3.5 million business customers, according to the AT&T Web site.
"It's a shame to see Geisse go, but putting de la Vega in charge of a new merged unit makes sense," said Gartner analyst Bill Menezes in a telephone interview. "Having a tightly integrated mobile-enterprise unit is what the corporate customer wants, and what the competition will have a hard time to deliver."
Based on feedback from Gartner's clients, Menezes said AT&T has been more successful than Verizon in providing enterprise customers a lower, unified price for different networking service needs that run from wired to wireless. For example, a single business typically wants its multimillion-dollar expenditure to a carrier on a large network deployment, such as MPLS (Multi-Protocol Label Switching), to count in favor of reduced wireless costs for its business users from the same carrier, Menezes said.
"AT&T will offer a unified product discount on a business customer's entire spend, and Verizon won't do that," Menezes said. "Verizon does offer a business a unified service contract, but it's not really unified pricing."
While AT&T and Verizon are both looking to minimize the impact of competition from cable companies that are building Wi-Fi hot zones, Menezes said AT&T will continue to see Verizon as its primary competitor, rather than Comcast if it eventually merges with Time Warner.
"Even though Comcast has a greater reach into business than Time Warner, a merger with Time Warner won't have the wireless reach of AT&T or Verizon," Menezes said.
Comcast has said it will have 8 million hot spots by 2015, and Time Warner already has 34,000 hot spots in major cities, but that doesn't mean a wireless user driving through one of their Wi-Fi hot zones will be able to connect in a smooth wireless hand-off from the Wi-Fi zone to cellular service, Menezes said.
In comparison to the cable companies, both AT&T and Verizon have worked to perfect handoffs between Wi-Fi networks and cellular, while cable companies "have no cellular offering other than reselling it."
If Wi-Fi is the main mobile offering from cable companies, it will have to be very widespread, so that a wireless user in a car can drive from hotspot to hotspot without losing a connection. "I don't view cable as a threat in that respect," Menezes said.
AT&T is also building up its ability as a provider of managed Wi-Fi services in big areas such as stadiums and shopping malls, Menezes said, and de la Vega will likely want to capitalize on those services. Managed Wi-Fi means giving a business customer location information on users, as well as user analytics, to improve how a stadium or mall operator communicates information and special offers and services.
Patrick Moorhead, principal analyst at Moor Insights & Strategy, said one advantage of combining mobile and business solutions at AT&T will be to eliminate duplicate functions and thereby lower costs. "More importantly, AT&T will present itself as one entity to the customer base," Moorhead said.
"De la Vega has proven that he had the chops to think creatively and decisively while at the wireless helm, and his team has managed Apple, HSPA+ and LTE quite well," Moorhead said.
De la Vega, a native of Cuba, is also considered a colorful and articulate spokesman for AT&T, but he is not from the same fiery mold of some other wireless industry executives, especially the outspoken T-Mobile CEO John Legere.
Both of the most senior CEOs at AT&T and Verizon, Randall Stephenson and Lowell McAdam, respectively, project more tempered personas, especially when meeting with investors and analysts, than other CEOs of U.S. companies.
Former Sprint CEO Dan Hesse was considered to be reserved and somewhat like Stephenson and McAdam in public appearances. Hesse was recently replaced as CEO by Marcelo Claure, a native Bolivian and billionaire who appears to be testing the waters for how aggressive he needs to be in public appearances and Sprint initiatives. So far, Sprint's been willing to cut prices, although T-Mobile has as well.
In the coming months, No. 3 Sprint will be heavily focused on a price war with No. 4 T-Mobile, analysts said. Meanwhile, AT&T and Verizon are virtually tied in the race to be the nation's largest carrier in total subscribers. Both are expected to concentrate on a measured message in order to woo corporate customers.
Lurie, in his new role as CEO of AT&T Mobility, could try to shake things up in the spirit of Legere, but his style won't matter as much as the substance of what he offers, analysts said.
"Glenn Lurie is very assertive and straightforward, but AT&T isn't as worried about his style as with the big picture and making things stay on track at AT&T," Menezes said. Lurie's work in the past on home automation technology will help AT&T develop a bigger market for wearables and other wireless devices, he said.
"I think Lurie won't back down from anybody, but he won't get down and wallow in the mud either," Menezes said.
One wireless technology that both AT&T and Verizon are expected to develop for use is Wi-FAR, or the 802.22 standard, that shares the underused TV band of spectrum called whitespace. Google, Microsoft and Facebook are all conducting trials with the technology, which can be used to send wireless signals over six to 18 miles in rural and remote areas.
Wi-FAR might not be a major wireless transport channel in the U.S., but could be important in developing countries. Both AT&T and Verizon have interests in doing business with customers abroad and neither carrier wants to let companies like Google invade their turf, analysts said.