Instat's Take on the Telecom Battle

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Randy Savicky
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Instat's Take on the Telecom Battle

With "blockbuster telecom mergers" all the rage in the news and the blogosphere, I thought it would be worth sharing Instat's take on it...

Top Telecom Brands Battle it Out for Business: AT&T and Verizon Rank High

SCOTTSDALE, Ariz., February 1, 2005 - Today's business telecom marketplace is more competitive than ever.  Major providers, both fixed-line and wireless, are merging, cable operators are attempting to increase their reach into the business market and systems integrators are targeting the budding managed-services market.  As such, survival in this industry will hinge on products, prices and preference, and not necessarily in that order.  Recent In-Stat research, (http://www.in-stat.com), shows that key providers have already begun to carve out meaningful brand "footprints," or brand reach, in varying segments of the US business market and that customers have begun to develop a preference for a few key brands.  However, for the major telecom brands, like AT&T, increasing brand reach, and, more importantly, defending its position, will be critical to long-term success in the future.

"Marketing messages may be deafening buyers in the cacophony of vendors selling similar services.  Brand relevance is the only thing that will allow messages to truly resonate with customers today." says Kneko Burney, a Chief Market Strategist for In-Stat.  "To simplify their buying process, business customers are establishing 'preferred' vendor relationships and are focusing on buying multiple services from these preferred brands.  As a result, the top priority for providers today should be to establish closer, more preferred relationships with customers - not simply following the pack in pricing and/or new product introductions."  Burney emphasizes the importance of targeting and establishing preference among key segments: small business, mid-sized business, enterprise, and in specific vertical industries, not just with general business.

A recent survey by In-Stat has also found that:

  • AT&T Wireless and AT&T (wireline only) were the top ranked national brands in all business segments. Of more interest, Verizon appears to be emerging as a major contender from the brand reach perspective, even in the broader national market.  
  • Of the regional operators, BellSouth appears to be the most preferred brand in its region across all sizes of businesses. In contrast, MCI is commonly perceived by business decision-makers as "unstable financially."  In the middle market, in particular, more than one-third, 35%, of respondents indicated such.
  • Across segments, the AT&T brand was the best-defined and generally associated with leadership.  However, because this company has such dominant brand reach already, it is definitely vulnerable to attack from emerging or expanding brands, particularly Sprint, Verizon and SBC.

The report, "Darwin Laughs: Exploring Brand Preferences for Network and Managed Services in the US Business Market, Part Four: US SOHO Businesses (1 to 4 Employees)" (#IN0401320SH),examine several aspects of key telecom and competitive provider's brands in the US business market: reach, value, preference and perception. The combination of these is believed to give insight into the potential success or failure of providers in this market in the long-term. Brand perception data is presented for each of the providers. To purchase this report, or formore information, please visit: http://www.in-stat.com/catalog/Ecatalogue.asp?ID=43



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