Editor’s Note: Each year, the RCR Wireless News editorial staff chooses the person who has impacted the wireless industry the most during the past 12 months. By successfully closing the acquisition of AT&T Wireless Services Inc., making Cingular Wireless the nation’s largest carrier, as well as beginning much-heralded consolidation among the nation’s largest operators, Stan Sigman is this year’s choice.
Consolidation among the country’s big six wireless operators has been predicted by industry analysts, called for by financial analysts and hinted at by industry executives ever since the Federal Communications Commission rolled back spectrum-cap rules in early 2003. But only one man made the bold decision to close a deal-one that has impacted nearly every corner of the wireless industry during the past year.
That man was Stan Sigman, Cingular Wireless L.L.C.’s no-nonsense president and chief executive officer, who decided that Cingular would have to expand its resource base if it wanted to be a true competitor in the ultra-competitive wireless space. That decision led to talks with fledgling rival AT&T Wireless Services Inc., a high-stakes auction, and the recently completed $41 billion acquisition of AWS, which not only bolstered Cingular’s resources, but propelled the carrier past Verizon Wireless as the nation’s largest wireless operator.
In contrast with the relatively high-profile approach Cingular has taken in its purchase of AWS, which has included analyst and media updates, the 57-year-old Sigman has maintained his low-profile management style by deflecting the impact of the acquisition to just doing what was best for Cingular.
“I’m a low-profile person, and this is not about me. This is about Cingular, the marketplace, the 70,000 employees and the shareholders of the company,” Sigman demurred. “I’m just not the type of individual that seeks nor really desires to have the spotlight on me. I’ve always been active in a leadership role within the industry, but I just don’t seek to have my picture and me being spoken about in particular. I would rather show what I can do rather than talk about what I can do.”
Sigman’s desire for action instead of words was echoed by fellow industry executives who note that when Sigman says he will do something, it’s as good as done.
“Stan called me and said, `I want to facilitate the deployment of broadband wireless into rural America,’ ” said Terry Addington, CEO of rural wireless provider First Cellular of Southern Illinois, recalling a conversation about expanding UMTS deployments. “He called me on vacation, told me of his idea and said can I help him with it. I knew right then and there that if I had Stan Sigman’s vision and word, we could run with this, and he has been standing by it.”
Sigman’s straight-talking approach to business can be traced to his rural Texas roots that eventually led him into the telecommunications industry in the mid-1960s with Southwestern Bell Telephone. Sigman’s tenure at Southwestern Bell included management positions throughout the company’s operations in Texas, Oklahoma and Missouri before finally settling into the wireless space in 1986 as executive vice president of Southwestern Bell Mobile Systems.
Sigman went international in 1991 when he was appointed managing director of cellular and paging for SBC Communications’ Telefonos de Mexico operations in Mexico City. The international assignment was short lived; Sigman was brought back state side in 1993 as vice president and general manager for Southwestern Bell’s Oklahoma market.
By 1994, Sigman was appointed executive vice president for Southwestern Bell Mobile Systems, where he was responsible for the carrier’s cellular markets, international ventures and product line development. One year later, Sigman was named president and CEO of the company.
In 1999, Sigman had migrated to SBC, where he was named group president of the telecommunications company’s national operations, which included responsibility for all of SBC’s domestic wireless and its SBC Telecom wireline offering. Sigman eventually assumed his current position at Cingular (a joint venture of SBC and BellSouth Corp.’s wireless assets formed in 2001) following a poorly received launch of the brand led by former CEO Stephen Carter in late 2002.
Sigman quickly took control of the wayward carrier, which had posted two consecutive quarters of net customer losses that many blamed on its original branding campaign, which stressed emotional expression at the expense of advertising rate plans or showing handsets. Cingular’s new direction was apparent by the first quarter of 2003, when the carrier reversed its customer losses and was on its way to adding more than 2 million new customers for the year.
But Sigman soon realized that to support the continued growth, Cingular would have to expand its operations.
Prior to Sigman’s decision that Cingular needed the additional assets of AWS to bolster its presence in the wireless space, the possibility of wireless consolidation among the nation’s six nationwide operators received strong support from most industry observers, but had resulted in little more than idle talk.
That changed Feb. 17, when Cingular announced it had emerged victorious in a short, but heated auction battle for control of AWS with international wireless giant Vodafone Group plc, which was looking to expand its reach in North America beyond its minority stake in Verizon Wireless.
“We needed a true national footprint and a path into most if not all top 100 markets,” Sigman said of Cingular’s interest in AWS. “We needed spectrum that gave us room to continue to not only grow voice but to deploy 3G technology. And we needed synergies that could be captured with larger customer bases and collapsing assets that worked together. The AT&T opportunity came along, and we found ourselves in an auction process, and we prevailed in that case.”
Looking back on the auction process that eventually garnered Cingular control of AWS, which reportedly was completed in the wee hours of the morning Feb. 17, the low-key CEO said he was surprised by Vodafone’s aggressiveness in attempting to acquire AWS.
“I don’t think we were as surprised that they were interested in the assets as we were surprised by how competitive and aggressive they got in the bidding process,” Sigman said. “There are obvious synergies for Cingular and AT&T in putting those companies together, but there wouldn’t be the same synergies for an actual buy out. But they were obviously very aggressive in trying to acquire those assets without being able to capture the synergies that the new Cingular will be able to capture, so that was surprising. But looking back on it, I have absolutely no regrets for our acquisition or the price we paid. I’m glad we have it and Vodafone doesn’t.”
As is his style, Sigman also deflected some the accolades in acquiring AWS to the contributions made by Cingular’s parent companies, SBC Communications Inc. and BellSouth Corp., which included a financial commitment based on their respective support for Cingular’s management and confidence of the wireless industry.
“SBC and BellSouth are very committed to the growth opportunities in the wireless space and they are making this investment to create growth for the respective shareholders,” Sigman said. “It speaks not only to their confidence in the company but also in the industry to deliver value back to shareholders. Anytime someone gives you $41 billion to make an acquisition, they are obviously confident in the industry they are making that investment in and the leadership team that is going to return the value to their shareholders.”
In addition to the impact the acquisition would have on Cingular, Sigman noted that the timing of the deal was important as the carrier did not want to get bogged down in an acquisition that many thought would take at least a year to complete.
“It was very important to get it done this year,” Sigman said. “When we filed with the FCC in March we were being criticized by the investment community for buying a poor-performing asset and there was nothing we could do about that performance until it closed. Fast-tracking the close would help alleviate those concerns.”
Sigman also said that he was concerned about the acquisition lingering beyond the November elections and into the always-important holiday shopping season.
“There was always a concern that there would be a change in administration with the election,” Sigman said. “That could have resulted in a change of a number of the appointments, and then there is the lame duck situation that could have delayed the transaction until new appointments and new review processes were enacted. Also, historically 40 percent of the annual buys in wireless come during the fourth quarter with the holiday buying season and we certainly did not want to miss that window of opportunity.”
With the acquisition now in the books and Cingular firmly planted as the new No. 1 in the wireless industry, Sigman sees his challenges as just beginning and is looking forward to the battle.
“We’ve got a lot of hard work still in front of us, but we also have a lot momentum going in our way,” Sigman explained. “I never dreamed I would find myself working as hard now and as mentally challenged as I am now, but I am more energized and more enthused about the future than I have been for a long time.”
