The prospect of taking SkyTel 2-Way messaging service from a workable technology to a marketplace product is at the crux of John Stupka’s new role as president and chief executive officer of paging giant Mtel.
In taking the helm at Mobile Telecommunication Technologies Corp., Stupka said he has the opportunity to apply his expertise in expanding and developing a wireless business. As president and CEO of Dallas-based Southwestern Bell Mobile Systems from 1985 to 1995, Stupka grew the company from zero customers to one of the largest cellular operators in the nation.
“I remember when the goal was to move 150 units a month,” said Stupka of his early days in cellular.
He spent the last year in San Antonio, Texas, as head of strategic planning & technology for SBC Communications Inc., the parent company of Southwestern Bell Mobile Systems.
Why leave the cellular business and SBC?
“It was a matter of when I looked at the opportunity, I felt a yearning to catch a ride on the growth engine again,” Stupka said.
He will take his new seat Aug. 1.
Mtel’s founder and Chairman John Palmer has been the acting CEO since January, when M. Bernard Puckett resigned as Mtel president and CEO. “Stupka has an unparalleled track record in building a profitable wireless communications business,” commented Palmer.
Scott Hamilton, head of Mtel’s investor relations, said that the day after Stupka’s appointment was announced, he received calls from current SBC investors who now are interested in Mtel stock.
Stupka will work hand-in-hand with Jai Bhagat, president and CEO of SkyTel Corp. SkyTel accounts for about 90 percent of Mtel’s business activities. While Bhagat’s expertise resides as a technology driver, Stupka said his own pursuit will be more strategic.
On SkyTel 2-Way’s early network setbacks, Stupka offered, “Anytime you take a bold step forward (with a) new technology, there are going to be some glitches*…*In most of the major areas-the need for additional receiver sites and different types of software, the need for a friendlier interface-Jai has done a great job of dealing with.
“From the point where the technology is workable to the point you have the public understanding the value equation takes a little time and a little expertise,” added Stupka, speaking of his immediate goal as Mtel president and CEO. “Mtel is about where Southwestern Bell Mobile was in the mid-80s*…*We had a workable technology, but customers did not understand why they needed it.”
To help the company improve its SkyTel 2-Way messaging service, Mtel has equipped a few thousand of its valued one-way customers with two-way units to determine which features might be trivial and which are more important or missing altogether, said Stupka. “Over time, I think you can hone the value equation. Two-way’s not going to explode on the scene. Everyone seems to forget the product introduction process*…*In the next three to five years you can look for explosive growth.”
Going forward, Mtel’s business will focus mostly on domestic one-way and two-way services. For one-way paging, the company will concentrate on maintaining quality of service and expansion. For two-way, “We need to define value and functionality,” said Stupka, noting the acknowledgement messaging function will prove very worthwhile to a large portion of the population. “We have this great technology; what is it that we can actually create?
“The whole industry is shifting and changing,” continued Stupka. “A lot of people are underestimating the profound impact of Internet technologies on the area of two-way messaging. The ubiquitous interface will allow tremendous growth once the products are at the right price and size.”
Outside of the United States, Mtel is involved chiefly in South America and Asia, said Stupka. He said the international marketplace has not been an immediate revenue generator, but that he expects that will change soon.
Stupka holds a bachelor of science degree in Industrial Engineering from the University of Oklahoma. He started with Southwestern Bell in 1974, where he became a division manager within several years. He joined the company’s new cellular company when it formed in 1983.
Stupka has been a guiding figure in the Cellular Telecommunications Industry Association, where he served as head of the technology division from 1984 to 1994 and was the first recipient of the CTIA President’s Award. Stupka established the Electromagnetic Center for Wireless Technology at OU two years ago.
For the second quarter ended March 31, Mtel suffered a loss of $28.6 million, or 57 cents per common share. In the second quarter 1995, the company’s loss was $4 million, or 13 cents per common share. Revenue for the second quarter 1996 was $80.6 million, compared with $50.6 million in the same quarter a year ago. One-way paging operations were responsible for $72.2 million in revenue, an increase of 55 percent from second quarter 1995. Hamiliton said the loss was expected, attributed primarily to the cost of its narrowband PCS license and network start-up costs, totaling about $300 million.
Standard & Poor’s last week lowered Mtel’s senior unsecured debt rating to single B-minus from double B-minus and lowered the company’s preferred stock rating to triple C+ from single B. The corporate credit rating was lowered to single B from double B.
