Ralph de la Vega tells his life story the same way each time. Watch his keynotes and commencement addresses on YouTube and a pattern develops: Same turns of phrase. Same cadences. With some CEOs, this might feel trite, like a band using the identical set list and stage banter night after night. But de la Vega delivers his narrative with such sincerity and conviction that it grows stronger with each telling. In that dusty old genre known as “the American success story,” his is a modern classic.
He recounts it again on a foggy afternoon in North Atlanta’s Lenox Park neighborhood, home to AT&T’s Mobile and Business Solutions arm, which de la Vega has led since the company merged the two divisions late last year. Seated in a small conference room, the 62-year-old telecom lifer explains that in the aftermath of the Cuban revolution, his parents decided to defect to the United States with him and his sister. After all, signs of Castro’s tightening grip were everywhere: Businesses, including his father’s food distribution company, had been nationalized. Neighbors spied on one another. At school, children were asked if they believed in God or Castro. “If we answered God,” says de la Vega, “we were told, ‘Then ask God for an ice cream cone. You’re not going to get one. But if you ask Castro, he’ll give you one.’ My parents said, ‘We don’t want to raise our children in this environment,’ so they made the ultimate sacrifice.”
In July 1962, the de la Vegas arrived at the airport in Havana. An official examined their papers, paused, then said, “Only the boy can go.” At the time, de la Vega was 10 years old. Forced to make an unimaginable decision on the spot, his father chose to send him ahead, arranging for his son to stay with a young Cuban couple in Miami until the rest of the family could get their departure documents in order. “I remember my father telling me that it was like I was going to a sleepover,” says de la Vega, “and that he would see me in a few days.”
So the boy went, arriving in Miami with only a pack of Chiclets in his pocket. The couple, Ada and Arnaldo Baez, met de la Vega at the airport and brought him back to their cramped apartment. “I was scared,” says de la Vega. “I didn’t speak English and neither did the Baezes, who themselves had just arrived in America.” Days turned into months turned into years. Heartbroken, de la Vega exchanged letters and the occasional phone call with his family, who were still unable to leave. In the meantime, de la Vega enrolled in school, learned English and watched his foster parents work their way into Miami’s fledgling Cuban middle class.
When his real parents finally arrived in 1966, de la Vega was forced to start over again. Only this time he played the role of the caretaker, helping his family assimilate and earning money working at a garment factory. Though he was a math and science whiz who dreamed of being an engineer, de la Vega had decided to drop out of high school and enroll in vocational school to take mechanics classes after a counselor told him he’d never make it in college. But when his grandmother, a former schoolteacher, arrived from Cuba, she caught wind of his career choice and set him straight. “She told me not to let anyone put limitations on what I could achieve,” says de la Vega. “So I graduated from high school, got my mechanical engineering degree and the rest is history.”
Jump to 2015 and de la Vega is leading AT&T’s efforts to diversify. With the cellphone market facing a dearth of new customers, the nation’s second-largest mobile provider after Verizon wants to connect everything else, most notably homes and cars. In 2011, AT&T and a group of sponsors invested $100 million to open a series of Foundry innovation centers around the country—high-end tinker spaces where developers turn everyday objects into connected platforms. Similar experiments are taking place at AT&T’s Drive Studio in Atlanta. Opened in January 2014, the 5,000-square-foot garage works with auto manufacturers such as Audi, Tesla and GM to make cars more seamlessly wireless.
Rather than focus on incrementally adding wireless subscribers the way some carriers do, AT&T is thinking big and trying to convince consumers and businesses that they have more wireless needs than ever before. Analyst firms such as Jackdaw Research have lauded AT&T as an industry leader in innovation, but the mobile market is competitive, and some wonder if these high-tech bets will pay off. “Is [AT&T’s] strategy too broad?” asked telecom consultant Jim Patterson in a recent piece for the industry news site RCRWireless. “Is it spreading itself too thin?”
But de la Vega is optimistic. “We were the first carrier to invest early in growth areas such as connected cars and the Internet of things,” he says. “Those areas are going to continue to grow. For the Internet of things, the forecast for 2020 is like 25 billion connected things. We think it’s a good opportunity.”
If you have a hard time picturing AT&T as a trailblazer with futurist tendencies, you’d be forgiven. Those of a certain age remember it as the monopoly that controlled most of the phone lines in the U.S. and Canada through the so-called Bell System dating back to the 1870s. And you might recall the 1982 antitrust suit that forced AT&T’s numerous subsidiaries to split into seven separate companies known as the Baby Bells. Though relatively strong through the ’80s and ’90s, by 2000 AT&T had entered a period of decline marked by internal conflict, bad investments and a poorly executed foray into cable. In 2005, Baby Bell SBC turned the tables on its former parent, purchasing AT&T for $16 billion.
Depending on how you look at it, it was matricide or a rebirth. Though AT&T no longer resembled the Ma Bell powerhouse it once was, SBC gave it another chance by renaming the entire merged operation AT&T Inc. and adopting the classic globe logo. “We are preserving an American icon,” SBC chairman Ed Whitacre told reporters after the big deal was announced. Whitacre also revealed a plan to market Cingular Wireless—then an SBC subsidiary—under the AT&T brand.
Into this flurry of acquisitions and rebranding stepped de la Vega, at the time Cingular’s chief operating officer. After receiving an engineering degree from Florida Atlantic University in 1974, de la Vega had worked his way up through the Bell System, starting as a facility engineer at Southern Bell in Miami. In the late-’80s, he got his MBA from Northern Illinois University and then cut his teeth, managerially speaking, on a series of challenging roles for BellSouth. As president of broadband and Internet service, he grew the company’s subscriber base from 30,000 in 1999 to more than 600,000 in 2001. Under his leadership, BellSouth Latin America made a profit for the first time ever.
“I never backed away from a challenge,” says de la Vega, adding that his grandma’s advice was ringing in his ears when he was tasked to integrate Cingular Wireless and AT&T Wireless—at the time the largest all-cash merger in U.S. history. When the dust settled in 2007, de la Vega became head of the newly formed AT&T Mobility. One of his very first projects helped transform the company into the innovation powerhouse it is today.
“The iPhone deal started when I was at Cingular,” says de la Vega. “We had worked with Steve Jobs on a little-known phone called the ROKR—the first to carry iTunes—so when he called me with questions about Apple’s very first smartphone, I perked up.” De la Vega was one of the first to see a working prototype of the iPhone. The late Jobs—who he describes variously as a “genius,” “tough negotiator” and “often very charming”—made de la Vega sign an nondisclosure agreement that forbade him from talking about the phone with even his wife and two sons.
De la Vega’s enthusiasm convinced AT&T’s upper brass to bet on the iPhone sight unseen, and the rest is history. AT&T was the exclusive carrier of the iPhone until 2011 and learned invaluable lessons from partnering with Jobs and Apple. “What the iPhone engrained in me and the company is that we can get to the future first,” says de la Vega. “We can do things that change the industry.”
It must be said that Ralph de la Vega is disarmingly friendly. Even his mustache looks cheery. In Atlanta, his handlers gush about him the way you would a favorite uncle. The same goes for his friends in the nonprofit world; the Georgia Aquarium, Boy Scouts of America and other institutions have all benefited from de la Vega’s guidance.
“With Ralph, what you see is what you get,” says Donna Stone Buchanan, COO of United Way of Greater Atlanta. Buchanan and de la Vega became friends when the two were at the nonprofit Junior Achievement of Georgia—he as a board member and she as its president. “He really cares. He’s very empathetic and wants to do things that matter and help others do the same.”
And de la Vega appears to be just as hands-on and attentive at the corporate level. When I visit the AT&T store at the Atlanta campus, one of the sales associates mentions that de la Vega sometimes pops in to make sure everything is running smoothly. The store is a new concept that’s rolling out around the country—with contemporary lighting, wood-accent walls and a decided lack of a checkout area, it’s a very public example of Apple’s influence on AT&T. Overall, its vibe is that of a hip, contemporary gallery with its electronic totems displayed for maximum visual impact.
A space that feels more unique to AT&T is its Drive Studio in the heart of the Georgia Tech campus. Director of product development Brian Greaves leads the tour, first through the lobby area, which looks like a small auto dealership showroom, complete with silver Corvette Stingray on display. In the back is a garage where AT&T develops back-end connectivity solutions for automakers—think voice recognition, navigation and Web-browsing apps that run on its Drive platform.
On one side of the space sits a black Tesla Model S that can go from 0 to 60 in 3.2 seconds without a drop of gasoline. Greaves can’t talk about what AT&T is developing for Elon Musk’s electric car company, but he says Tesla has been a leader in connectivity (its navigation system, for example, updates automatically through a cloud server).
Greaves estimates that in 2015, AT&T’s share of the connected car market will be close to 50 percent—more than any other carrier. In the fourth quarter of 2014 alone, it added 800,000 new connected vehicles, and the company now boasts relationships with eight auto manufacturers (compared to Verizon’s four and Sprint’s two).
On the back wall of the garage sits a working display of Digital Life—the company’s all-digital, all-IP home security and automation platform. The small garage door—thermostat alarm keypad and light all can be controlled through your phone. The Drive Studio is working on ways to sync your car to your house so that someday when you turn onto your street, your garage will automatically open, your security system will be disarmed and your furnace can kick on.
In addition to cars and homes, AT&T is aggressively expanding into other realms of the so-called Internet of things and now connects 2,200 different types of devices on its global network—from wearables to shipping containers to trash cans that alert waste management companies when they’re full. Phones, too, of course, but those are so 2014.
For all his candor, there are two things de la Vega can’t discuss during our conversation. At press time, AT&T was awaiting FCC approval for its proposed $48.5 billion purchase of DirecTV. It wants the broadcast satellite provider’s 38 million subscribers as well as the ability to stream content on customers’ mobile devices (video is another big growth area for AT&T).
But the other topic is an elephant in the room: How does de la Vega feel about the recent softening of the relationship between the United States and his native country? He can’t say anything about it (for “political reasons,” is what I’m told by the AT&T spokesperson who set up our chat). Many older Cuban Americans protested the renewed diplomatic relations, and de la Vega would certainly be excused for siding with his generation of immigrants. But he’s also a businessman, and there’s definitely business at stake between the two countries. Ever the diplomat, he admits to listening to all sides of an issue, and in his personal and professional lives, he’s shown a willingness to change and sacrifice for the greater good.
Whatever the case, de la Vega believes that leaving Cuba was the right choice. “I run a wireless company with more than 120 million customers,” he says. “It’s ironic when you think about a Cuban running it. Cuba has one of the lowest cell penetration rates in the world. Had I not come over, who knows what I would have done? That decision my parents made was tough, but it changed my whole trajectory.” A good call, you might say.