Edward Whitacre Jr. turned SBC Communications, the smallest of seven local phone companies created by the breakup of AT&T (T) in 1984, into a communications giant.

As CEO, Whitacre took on opponents of consolidation in the telecom industry, steering SBC through a series of acquisitions and mergers.

He upgraded SBC's communications network, made up of old copper wiring going into homes and offices, so that it could sell Internet and wireless services.

Along the way, Whitacre coaxed SBC's shareholders and institutional investors to go along with multibillion-dollar investments and possibly risky acquisitions.

And he regularly met or beat Wall Street's earnings expectations.

"You have to walk a hair-thin line between pursuing a long-term vision and delivering short-term results," he said in Hugh Davidson's book "The Committed Enterprise."

Whitacre's board of directors trusted his moves.

"Ed doesn't let things get complicated even if they are," August Busch III, the retired chairman of Anheuser-Busch, (BUD) told IBD.

"He takes a straight-forward, common-sense approach."

Whitacre adopted that trait while growing up in Texas. He was born in Ennis, 35 miles south of Dallas. The son of a railroad engineer, he graduated from Texas Tech University with a degree in industrial engineering in 1964.

The summer after his junior year in college, he applied for a job with Southwestern Bell Corp. in Dallas. When the manager said there were no openings, Whitacre refused to leave. He offered to do anything. The manager gave him a job hammering in fence posts and measuring phone wire.

Up The Telephone Pole

He was measuring office furniture soon enough.

By 1990, he was at the top — chief executive at SBC while the telecom industry took on big changes.

Whitacre moved quickly after Congress passed the Telecommunications Act of 1996 in February that year. The telecom act had a big downside for SBC: It ended local phone monopolies, exactly what his company enjoyed.

Whitacre focused on the upside: The telecom act shed some regulatory yokes. It ended restrictions on where and how local phone companies could compete.

San Antonio-based SBC, which operated in just five states, could go national or even global. Soon after Congress passed the telecom act, Whitacre pounced. SBC acquired Pacific-Telesis Group in April 1996.

The deal marked the first merger among the seven regional Bell operating companies. It expanded SBC's reach into California.

The merger created the nation's second-biggest phone company in terms of market value, next to AT&T. The next spring, Whitacre started talking merger with AT&T.

The long-distance giant had purchased a wireless business, McCaw Communications, in 1994.

Now AT&T needed a way to break into the local phone business. Combining with SBC would plug it in.

But hold the phone. The idea of AT&T merging with one of its former offspring had antitrust implications. Regulators or lawmakers could try to block the link.

News of a possible deal spilled into the papers. The chairman of the Federal Communications Commission, Reed Hundt, called an AT&T-SBC merger "unthinkable."

AT&T and SBC faced a big decision: whether to announce a deal and fight for regulatory approval. Whitacre decided to walk away. He felt uneasy with AT&T's lobbying and public relations approach to win approval for a merger.

Whitacre knew he would dial that number again. All he needed was patience, even if it took a decade.

In March 2005, a bigger, stronger SBC bought a smaller, weaker AT&T. Whitacre made the call without much objection from regulators — and took over as AT&T's CEO. He retired two years later, in June.

"He put Humpty Dumpty together again," Hundt, now at consultancy McKinsey & Co., told IBD. "He did what was thought impossible by reassembling AT&T."

Whitacre had pressed on after the first AT&T deal fell apart.

In 1998, SBC announced deals to acquire Southern New England Telecom, based in Connecticut, and Midwest-based Ameritech.

Whitacre didn't mind paying a high price for Ameritech — $55 billion in cash and stock — to further his goal.

When consumer groups argued that SBC's purchases could snuff out competition, Whitacre tapped SBC's war chest.

"They threw an enormous amount of resources into getting approval. There were large armies of lawyers, lobbyists, public relations people," Blair Levin, an analyst at Stifel Nicolaus, told IBD.

The Ameritech deal let SBC sell long-distance phone calls for the first time.

On the downside, the move took the wind out of SBC's stock. Shares tilted as SBC faced high costs upgrading Ameritech's network to improve customer service.

Whitacre pressed on. He brought in SBC managers that he trusted to fix Ameritech's problems. He built a team of experienced managers that mastered the task of integrating the operations of acquired companies.

Whitacre eyed expansion into wireless and the Internet, two fast-growing areas. In 1999, SBC invested in Project Pronto, a $6 billion project to expand Internet services.

The next year, SBC and BellSouth combined wireless operations. They called the venture Cingular.

The SBC-BellSouth partnership faced a key test in February 2004. A bidding war broke out for AT&T Wireless, which parent Ma Bell had spun off. Cingular and U.K.-based Vodafone wanted AT&T Wireless badly. On a Monday night, Vodafone executives went to sleep in London thinking they won the contest.

Whitacre stayed up. He would not be denied. In the middle of the night, he persuaded the boards of BellSouth and SBC to up their cash offer just enough to win AT&T Wireless, stunning Vodafone.

Some analysts said Whitacre hoped to block Vodafone, (VOD) a Verizon (VZ) partner, from emerging as a bigger force in the U.S. wireless market.

Not so, says Roger Altman, chairman of investment group Evercore Partners, an adviser to SBC on the deal. "Ed was thinking in terms of what he could achieve with it (AT&T Wireless)," Altman said. "I never knew Ed to do any M&A from a defensive point of view. It was all about building the company."

A Singular Pact

The deal catapulted Cingular to the No. 1 wireless company, ahead of Verizon Wireless.

Under their arrangement, SBC and BellSouth co-owned Cingular. But Whitacre believed Cingular needed to be under one roof.

In early 2006, Whitacre stepped up efforts to buy BellSouth.

The Atlanta telecommunications outfit wanted to stay independent. But Whitacre persuaded BellSouth's CEO, Duane Ackerman, to sell for $67 billion.

"Price was never the sticking point," said Altman. "It was really about strategy and whether AT&T and BellSouth were stronger together or stronger apart."

BY REINHARDT KRAUSE