John Donovan was officially named CEO of AT&T Communications, confirming reports that the tech-industry executive would oversee the carrier’s traditional phone businesses as well as DirecTV.
Donovan, who moved to AT&T from VeriSign in 2008, is largely credited with being a driving force behind the telecom’s move to virtualize its network. Donovan has also spearheaded AT&T’s efforts to implement new business models for its carrier partners in an effort to reduce network costs.
AT&T announced Friday that Donovan’s new purview will include its Business Solutions, Entertainment Group, and Technology & Operations Groups. The move is part of a broader strategy as the carrier restructures ahead of the closing of its acquisition of Time Warner.
John Stankey, who has worked at AT&T for three decades, will lead the team integrating the two companies and “will work closely” with Time Warner CEO Jeff Bewkes “for a smooth leadership transition,” AT&T said. Stankey, who previously headed AT&T’s Entertainment Group, will become CEO of the media company once the merger is complete. Meanwhile, Global Marketing Officer Lori Lee will expand her responsibilities to oversee AT&T’s international operations.
Donovan, Stankey and Lee will all continue to report to Randall Stephenson, who remains in place as AT&T’s chairman and CEO. The changes take effect tomorrow.
While the official announcement was made Friday, Bloomberg reported more than two weeks ago that “major organizational challenges” were in store as the company prepared to expand beyond telecom into digital media. Bloomberg described the restructuring as “one of the largest at AT&T since ‘Ma Bell’ was broken apart” by U.S. regulators 33 years ago, creating seven regional “Baby Bells.”
Donovan faces some major challenges as AT&T strives to leverage the colliding worlds of telecom and media to become a cross-platform provider of content and advertising. AT&T’s overall broadband revenues were down slightly in the second quarter, although IP broadband revenues grew by 3.2%. The company posted a net loss of 89,000 postpaid phone subscribers during the quarter, beating analysts’ expectations but continuing a long streak of postpaid losses. And while DirecTV Now enjoyed 152,000 subscriber gains during the quarter, the DirecTV satellite service shed 156,000 users.
“We look forward to completing the deal and delivering for customers the many benefits of this merger,” Stephenson said in AT&T’s brief statement.