AT&T's New Operator

CEO Randall Stephenson talks about the challenges of getting the iPhone to market

Randall L. Stephenson is the new king of telecom. On June 3 he took over as chief executive of AT&T Inc. (T ) from Edward E. Whitacre Jr. Right off the bat, he faces a stiff test: On June 29, AT&T's wireless arm, formerly Cingular, will start selling Apple Inc.'s (AAPL ) long-awaited iPhone. Stephenson, 47, talked with BusinessWeek's Roger O. Crockett.

The temptation is to look at what Ed Whitacre built and say the dealmaking's over, and maybe the rapid growth, too.

If you were to say that dealmaking and growth are over, you would be saying the industry is stagnant, and I can't think of anything further from the truth. I can't think of an industry where there's more demand for information, entertainment, bandwidth. Slow growth? Our wireless business has a $40 billion revenue stream and is growing in double digits.

Your video service stumbled out of the gate but seems to be picking up momentum.

Look, we launched a fundamentally new technology from the ground up. That happens about once every decade. We did wireless in the '80s. I don't think you'd say wireless stumbled out of that gate, but it took a couple of years to get going. Now wireless is the center of who we are. IPTV will be our next multibillion-dollar revenue stream. We're working hard to have the largest video platform in the U.S. [AT&T later clarified to say that statement applies only to the states it serves.]

A ton of attention is focused on the iPhone launch. But most AT&T sales-people haven't had a chance to really learn the phone. What will you do to make sure they know what they're talking about?

[Laughs] There have only been five people in AT&T and maybe only five at Apple who have handled that phone in any extensive way. Look, getting a product ready in stores is something that we do [all the time]. There is nothing new here. It's been a meticulously planned launch for the past two years. We're prepared for people camping out in front of our stores.

What contribution will iPhone make to your growth?

I expect it to be significant. Steve Jobs has said he expects to sell 10 million through 2008. I hope he's right. I hope he's low! The iPhone will drive people to stores for the sale of all our other devices. Our objective is to own all aspects of [communications] in the home. The iPhone is critical to this.

    Before it's here, it's on the Bloomberg Terminal.