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Mandl, Alex J

MANDL, ALEX J.

Alex J. Mandl served as the CEO of Teligent, Inc., a Virginia-based telecommunications upstart, from August 1996 to April 2001. He left his post as president and COO of AT&T Corp. to head up the new competitive local exchange carrier (CLEC), which uses its own high-frequency microwave and broadband SmartWave networks to offer local and long-distance phone services, Internet access, World Wide Web hosting, and similar services to small and mid-sized businesses. With Mandl at the reins, Teligent grew into a firm with $152 million in 2000 sales, and services in 43 U.S. cities, as well as in Argentina, Spain, France, and Germany. When long-distance provider IDT bought Teligent in April of 2001, Mandl resigned.

Mandl began his career in 1969 at Boise Cascade Corp., where he worked as a merger and acquisition analyst until 1980, when he accepted the position of senior vice president of finance at Seaboard Coast Line Industries. In 1988, Sea-Land Service tapped Mandl as chairman and CEO. Three years later, he moved to AT&T as chief financial officer, a position he retained until 1993, when he was named executive vice president and CEO of the firm's communications service division. In January of 1996, Mandl became president and chief operating officer of AT&T. According to Telephony columnist Jason Meyers, "Mandl accomplished every major task asked of him during his five-year tenure. . .his legacy includes AT&T's successful acquisition of McCaw Cellular Communications and its classification as a non-dominant carrier by the Federal Communications Commission." The McCaw purchase was particularly important to AT&T because its ill-fated takeover of NCR Corp. in 1991 had cost the company roughly $4 billion in losses when the anticipated synergies between communications and computers failed to materialize. As AT&T began seeking non-computer avenues of expansion and analysts began to sing the praises of bundled communication services, Mandl recognized that AT&T's lack of cellular services was a major shortcoming. When negotiations launched between AT&T and McCaw, he pushed AT&T's CEO, Allen Robert, to buy the cellular firm outright. The $12.6 billion purchase resulted in the formation of AT&T Wireless, which evolved into the largest wireless services provider in the U.S.

A relatively unknown firm, Associated Group, coaxed Mandl away from AT&T in August of 1996, offering him a $20 million signing bonus and an 18 percent stake in a new wireless service provider that would compete with local exchange carriers, Associated Communications. Since the early 1990s, Associated Group had owned licenses to sell wireless services in 31 U.S. markets. The deregulation of the telecommunications industry in 1996, which permitted competition in the U.S. local telephone carrier market, prompted Associated Group to make use of its licenses via Associated Communications, which Mandl agreed to manage. The upstart became known as Teligent when Mandl took it public in November of 1997.

To prepare Teligent for the launch of its services, Mandl spent most of 1997 and 1998 developing the firm's infrastructure and securing permission for it to operate as a CLEC. Teligent's technology offered several advantages over competitors like WinStar Communications. For example, its low 18 GHz frequency extended the coverage and capacity of Teligent's digital microwave networks. In contrast to the costly copper and fiber networks typically used by local carriers, Teligent relied on digital signals transferred from home base sites to antennas mounted on the roofs of office buildings housing clients. The cost savings allowed Teligent to undercut competitors' prices by 25 percent.

Services were activated in ten U.S. cities in October of 1998, and by the end of 1999, Teligent was operating in 40 major markets. Sales reached $31 million, yet losses totaled $539 million. In 2000, although revenues grew to $152 million, losses of $808 million and the firm's $1 billion debt started to concern investors. The telecommunications industry as a whole began experiencing a downturn, and despite Mandl's cost cutting efforts, which included laying off employees and scaling back growth, shareholders began dumping stock and funding disappeared. Long-distance firm IDT purchased a 54 percent stake in Teligent in April of 2001. Shortly thereafter, Mandl resigned. In May, Teligent filed for Chapter 11 bankruptcy protection, and analysts began to speculate about where the former AT&T executive might land next.

FURTHER READING:

Andrejczak, Matt. "Former AT&T Head Takes Teligent Public." Baltimore Business Journal. October 24, 1997.

Dix, Denise. "Teligent's Mandl Sizes Up a Tough Market." Network World. March 6, 2000.

Elstrom, Peter. "Telecom Meltdown." BusinessWeek Online. April 23, 2001. Available from www.businessweek.com.

Haynes, Peter. "Teligent's Test." Forbes. March 9, 1998, 202.

Meyers, Jason. "Mandl Forgoes Goliath for Would-Be David." Telephony. August 26, 1996.

Swartz, Nikki. "InTeligent Challenger." Wireless Review. March 31, 1999.

"Teligent Files for Chapter 11 Bankruptcy." Fiber Optic News. May 28, 2001.

"Teligent Reports $152 Million in 2000 Revenues; Records Nearly 400 Percent Growth in Second Full Year of Operations." Business Wire. February 28, 2001.

"Teligent Scales Back Telecom Effort." The Business Journal. December 1, 2000.

"Turning to Chapter 11; Teligent Declares Bankruptcy." Telephony. May 28, 2001.

Warner, Bernhard. "Alex Mandl." Brandwek. October 7, 1996.

SEE ALSO: Teligent Inc.

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