Global Telecoms Business: Interview – Ralph de la Vega of AT&T

23 February 2015

Months after AT&T’s Ralph de la Vega’s brief was extended from mobility to include business solutions, he tells Alan Burkitt-Gray how this move matches the changing needs of global enterprise

Enterprise goes mobile as AT&T puts business and mobility into one unified operation

If anyone was wondering whether large operators are shifting their focus from fixed services to mobile, the answer — a resounding Yes — came in August 2014 when Ralph de la Vega was appointed president and CEO of AT&T Mobile & Business Solutions.

For a full seven years he had occupied a similar position as president and CEO of AT&T Mobility, running the US group’s successful mobile network. A mobile network that was US-only.

Now, de la Vega is responsible for the group’s wireless and business services operations, which serve more than 116 million mobile customers in the US and more than 3.5 million business customers in 100 countries. So that’s still US-only mobile, but a global business operation.

Where’s the connection? Growth is in mobile.. Growth is in the internet of things. Growth is in business mobility.

“Now we’re approaching all those with one organisation,” says de la Vega. “It is giving us even greater scale.” Especially in machine-to-machine, “where we have 18 million connected devices” at this early stage in the market. “This is going to make us stronger.”

And big data is a factor, too, he adds. “We can offer our global customers the ability to wrap big data” around the offering. With software moving to the cloud, connectivity with mobile devices is a major focus. “Customers require more connectivity and more security,” he says.

But AT&T offers mobile services just in the US? “We are one worldwide organisation that offers end- to-end services. Customers can come to us.”

At Mobile World Congress in Barcelona in March, AT&T will be talking about its highly secure mobile cloud services, “whatever the endpoint, including tablets and laptops”, he says. “It makes more sense to make sure those devices have better connectivity and that they are connected securely.”

AT&T works with a wide number of cloud companies around the world, he adds. “There are more than 10 providers, and when I walk into an enterprise in different countries I can say that we protect your endpoints. The enterprise can come to the cloud provider of choice,” he says.

Secure your network and your data

“This will be a big emphasis for us in Barcelona: all those internet of things networks that have to be connected securely. When I talk to CIOs, these same issues come up time and time again: how to secure your network and your data, and mobility.”

Mobility in the enterprise, he means. Enterprises are increasingly wanting to untether their employees. He gives an example: “We’ve done a deal with Shell,” he says.

This was announced in September 2014, a few weeks after de la Vega was appointed to his new role. It is a five-year agreement to migrate 150,000 employees and contractors in over 50 countries to a new unified communications platform that will allow them to connect to each other — via instant messaging, voice, web and video conferencing, and application sharing — using a single, intuitive interface. “They’re taking the desktop and throwing it away, and throwing the PBX system away,” says de la Vega. “They’re replacing them all with voice over IP on the tablet, the laptop and the smartphone.”

Shell employees will communicate with voice and video messages. “It’s amazing how things have changed,” says de la Vega on a regular old wired phone call — albeit an IP phone call — from Atlanta to the Global Telecoms Business office in London.

People don’t use wired phones much any more, he says, poking fun at GTB’s technology. “People are confused about how to set up three-way calls.” They’re hard to use “and people are hardly ever in their office any more”, he adds. And it’s not stopped. “This business — it’s amazing how fast it’s going to move.”

But we turn back to the combination of mobility and business in de la Vega’s portfolio. Business is global, but AT&T’s mobile operation is US-only. How do they fit together?

He’s not worried. Long ago AT&T set itself almost apart in the US by opting for international GSM technology for its mobile services — like the much smaller T-Mobile US but unlike Verizon and Sprint, both of which opted for CDMA technology for 2G and 3G.

Global mobile roaming

This distinction ends as 4G LTE technology takes over in the US, but the history still means that AT&T is used to global mobile roaming. “We have a long history of partnering with others because of the size of our business in the US and because we are a GSM player. We have great roaming agreements,” he says. And last August’s announcement has taken this one step further, he says. Before then, international business customers could not access services through one organisation within AT&T.

“They had to work with two, landline and mobile. Now we are going to market with one and that makes us more efficient,” says de la Vega. “We’ve been there a long time, but this is taking us to another complete level.”

Even in the US, because of the way the industry was broken up 30 years ago and then reassembled into a small number of operators, AT&T had landline networks in only 22 states. But with mobile, it can deliver services to all states, he says.

He didn’t say it, but it’s a profound change of culture within AT&T. Mobile is the future, especially for business communications. Mobile untethers business users — and it untethers AT&T from having to deal with its rival landline operators in the US in order to provide business services.

AT&T has already taken significant steps in developing its mobile business into a global operation. It has developed what it calls a global SIM, a SIM card that can be fitted into any device that’s connected to the internet of things — whether that device be an e-reader or a container or a car.

The idea is that the equipment manufacturer doesn’t know where the unit will end up in the global market. Should it have a SIM card from Deutsche Telekom to work for units sold in Germany? A Vodafone SIM for the UK, a VimpelCom SIM for Russia or a Telefónica SIM for Spain and Latin America?

Connect anywhere

AT&T’s global SIM will work where it’s sent. “This is helping the internet of things market,” says de la Vega. “Companies are able to connect in any number of countries. One of the things Randall Stephenson and I agree on is that this is a global business.” Stephenson is AT&T’s chairman and CEO, of course, the person who appointed de la Vega to his position last August.

And this applies to the corporate communications market as much as to the internet of things. “Look at the things we are able to do for Shell. Our core competency is that we can follow customers around the world and service the large multinationals,” he says. “And large corporations are a substantial part of the business.”

However, AT&T is expanding its mobile activities beyond the borders of the US. In November 2014 the company announced plans to spend $2.5 billion inclusive of debt on buying Mexican mobile operator Iusacell from Grupo Salinas. That will bring 8.6 million customers. The transaction is likely to take until the middle of 2015 to be completed.

This operation is not part of de la Vega’s unit, he says. Group president and chief strategy officer John Stankey will be in charge of the integration — and then the company will decide where it fits.

“This is a very special opportunity by Randall Stephenson to create one calling zone in North America,” says de la Vega. “There is a very large Hispanic market in the US. It’s a great fit for our customers.”

A few days after de la Vega’s interview with GTB the company said it was going to spend another $1.8 billion on buying Nextel Mexico, which has 3 million customers. This will be combined with Iusacell — but, again, the deal will take until mid-2015 to be completed.

The idea is that AT&T’s customers in the US will be offered the opportunity to call customers in Mexico as part of their package. And, no doubt, vice versa. So what are the other opportunities that AT&T is looking at? At the end of December, US president Barack Obama announced that he wants to restore diplomatic relations with Cuba. Business opportunities will no doubt follow.

De la Vega was born in Cuba and, he says, “This is a huge opportunity. Cuba is one of the least penetrated markets in the world.”

It has been compared with Burma — or Myanmar — where two global operators, Ooredoo and Telenor started mobile operations in 2014 and have signed up millions of customers, people who were previously denied access to communications and the internet.

“But we’ll have to wait and see,” says de la Vega, who has not been back to Cuba. “Clearly there are huge opportunities. We are looking at them but we need to get more details. We’re studying.”

View the article at Global Telecoms Business here.