From the windows of his office on the thirty-seventh floor, the most influential Texas CEO you’ve never heard of has a pristine view of downtown Dallas. Unfortunately for Randall Stephenson, the prospects for his industry aren’t as clear. As the head of AT&T, Stephenson has budgeted $22 billion in capital spending in 2013—likely the highest amount of domestic investment by any public company—to bring the latest 4G and fiber-optic technology to customers and prepare to pull the plug on the old phone system that has connected us for generations. It’s a risky strategy, but Stephenson sees little choice. “If you miss just one technology cycle in this industry,” he says, “you can die.”

The gamble is intended to keep the nation’s eleventh-largest company moving in a cutthroat market. AT&T is a lumbering giant, posting nearly $127 billion in sales in 2011 but growing at a rate of less than 3 percent a year. But thanks to the insatiable demand for smartphones and tablets, its wireless business is growing at more than twice that rate, though it still trails behind Verizon Wireless. If he makes the right moves, Stephenson believes profits can grow faster than sales, keeping investors satisfied. 

A numbers guy by training, the 52-year-old hardly seemed destined for the corner office. Growing up in Moore, Oklahoma, he was the first in his family to go to college, studying accounting at the University of Central Oklahoma. Stephenson began his career in 1982, when his brother helped him get hired at the local phone company. (His brother still works as an installer in Norman.) Stephenson was assigned to the overnight shift in the computer room. If a program didn’t run, he could either figure it out himself or wake up someone at three in the morning to fix it. Needless to say, he got pretty good at solving problems.

In 1986 he finished his master’s degree in accounting at the University of Oklahoma, and Southwestern Bell offered him a job in St. Louis. This was only two years after the breakup of Ma Bell, and the company was just getting on its feet. “It was this unbelievable opportunity to go into a mess,” Stephenson recalls. “You were starting everything from scratch.”

He first worked in the tax department, where he was asked to straighten out a problem. Then he was given another problem, and another, until he had worked in seven or eight positions. At one point he said to his boss, “Every time I fix a mess, you pull me out and throw me into another mess.” His boss replied, “You’re finally figuring out your value.”

After six years in St. Louis, he was assigned to oversee finances at Teléfonos de México, which Southwestern Bell had invested in along with Mexican magnate Carlos Slim Helú. In Mexico City, Stephenson learned at the feet of a master. In 1994 the peso lost half its value almost overnight. Stephenson calls it “an existential moment,” one that required swift decision making. Slim slashed spending by more than two thirds and shored up the finances, surviving the crisis. He also made a big push into wireless, allowing customers to prepay for service, a move that eventually helped Slim become the richest man in the world.  

Stephenson returned to the company’s headquarters, in San Antonio, in 1996. The chairman and CEO at the time, Edward Whitacre Jr., was building a behemoth, acquiring PacTel, BellSouth, Cingular Wireless, and the old AT&T (which became the new company’s name in 2005). At the same time, Whitacre was running Stephenson through a series of jobs intended to test his skills and increase his exposure.  

When Whitacre retired, in 2007, Stephenson took over, just as the industry-changing iPhone was being unveiled as an AT&T exclusive. Within a year, the protégé proved he wasn’t afraid to shake up the corporate culture: he relocated the company to Dallas. 

“It was a terrible blow to me,” Whitacre says, “and a terrible blow to the city.” To be sure, Dallas offered a sweet deal—a $5 million grant and an estimated $6.3 million in tax breaks—but Stephenson said the incentives weren’t the issue. Instead, he says, the move offered better access to air travel and improved the opportunity to hire top engineering, accounting, and marketing talent.

Just like in the early days, Stephenson learned firsthand that managing AT&T’s complex business could be messy. The iPhone, for instance, was wildly popular, but it also taxed the company’s network. Smartphone users began gobbling up so much data that AT&T couldn’t keep up, resulting in dropped calls, slow service, and angry customers. Stephenson had to invest resources to upgrade the company’s network, and he overhauled service plans to make them more lucrative by phasing out plans that offered unlimited data.

Then, in March 2011, Stephenson made an ambitious play to make AT&T the nation’s largest wireless carrier and provide it with much-needed spectrum—the airwaves required to transmit wireless signals—to meet the demands for data. He bid $39 billion to buy competitor T-Mobile USA, but regulators opposed the consolidation as anti-competitive. AT&T eventually threw in the towel and had to pay $3 billion in breakup fees to T-Mobile and turn over nearly $1 billion in spectrum rights. It was an embarrassing fumble for Stephenson, particularly given Whitacre’s skill at vacuuming up one competitor after another.

With at least 44.5 million of AT&T’s customers now packing smartphones, Stephenson has scrambled to find more capacity. Through negotiations with regulators, he was able to repurpose spectrum that the company already owned and acquire additional spectrum elsewhere. 

Next on his plate will be to more than double the number of homes and businesses that can subscribe to AT&T’s U-verse, which bundles phone, Internet, and digital television services. Stephenson says he is already asking when the old legacy phone service can be powered down, which will save the costs of maintaining an outdated system. In another couple of years, when the U.S. market is near saturation, more big bets may be needed. If AT&T wants to keep growing, Stephenson may have to look at acquiring companies abroad. “I think it’s inevitable,” he says. 

Outside of his job, there’s yet another challenge. In 2014 he is scheduled to become the national president of the Irving-based Boy Scouts of America, which has been under fire for a long-standing policy that excludes openly gay members and leaders. Stephenson is 1 of 2 members of a 74-man executive board who have recently spoken out against the rule. “My view on this is pretty strong,” he says. “I think, over time, the situation will be addressed.” In fact, Stephenson says, AT&T is considering withholding its corporate donations to the organization until the policy changes.

It’s a tough stance. But William Daley, the former U.S. commerce secretary who worked with Stephenson years ago when he was the president of the company, isn’t surprised. “Randall’s in the twenty-first century,” he says. “He’s not stuck in the twentieth century like a lot of people.”