Ringing in the changes

Telecom companies rethink how to reach their audiences

Telecom companies rethink how to reach their audiences

The telecommunications industry is not as it once was. In a year rife with change, from wireless consolidation to the advent of voice-over internet protocol (VoIP) to increasing competition from cable companies, telecommunications companies faced a number of daunting PR challenges. "This is an industry that is in tremendous flux," says Fleishman-Hillard SVP Michael Coe, who works with SBC Communications. "[Companies are] focusing on protecting their core services while moving into new growth areas, all while trying to communicate a key message of stability and reliability." In fact, reliability could very well be the buzz word this year. Telecom companies are working hard to let customers know they can still rely on them for the services they have always needed, such as phone service, but can also rely on these telecom brands to provide new services, such as VoIP. But some telecom companies, such as AT&T and MCI, have had to change the way they market to customers. When the courts ruled last year that telecommunications companies did not have to provide access to their infrastructure at wholesale rates in order for other firms to provide consumer services, it substantially increased the cost of access to that infrastructure. As a result, MCI and AT&T have decided to stop actively marketing to consumers (although both still have consumer customers), and both have switched their focus to business customers. Last year, AT&T undertook a major branding campaign to present itself as "the world's networking company" and help transform the public's and business world's views of AT&T from a phone company to tech company. Business is about global networking, asserts John Vernagus, AT&T's corporate VP of brand marketing and management. And as IP grows as the dominant means of carrying data for businesses - whether that data is voice or electronic - AT&T wants to be seen not as an antiquated phone company, but as a tech powerhouse that can meet businesses' communications needs. "We've had strength in enterprise networking," says Vernagus. "We just didn't talk about it enough. And consumer messaging tends to get more attention by the nature of mass marketing. But part of this latest campaign has been about consistency. We're no longer fighting on multiple fronts with multiple messages to multiple audiences. As this is a very uncertain market, we must be very clear about what we do, and that is the IP leadership we bring and the network design reliability we offer." MCI has a very similar focus. The company "has made it very clear the future of our business lies in the enterprise space," says Peter Lucht, corporate communications director. Educating customers Like AT&T, MCI sees IP as the future of telecom because all information - voice, video, data - rides on the same network. But one challenge these firms face is convincing business customers that they can rely on them for services that they wouldn't expect from companies once best known for phone service. "Our goal is to communicate why MCI is positioned to take advantage of the transition to IP," explains Lucht. "We need to explain why MCI is best positioned to thrive in this space. We are educating customers about the advantages we can bring to them and using the trust we already have with customers and extending that to these new services and IP, and getting them more comfortable with the notion that we are a technology company." Appealing to the CIO is a smart move because they are the ones buying IP services, says Vince Hulbert, SVP and deputy director of Hill & Knowlton's New York corporate and tech practices. But companies have to be careful not to get mired in speeds and feeds. Because whether they are selling phone or IP services, companies ultimately make buying decisions based on business benefits, says Hulbert, who works with MCI. "Along with explaining the benefits of IP services, and the ability to deliver them, these companies need to be seen as leaders in IP services," adds Hulbert. Not that the consumer space is being ignored. SBC, Verizon, Sprint, Qwest Communications, and others are still fighting over consumers. But now they're facing competition from cable companies that not only offer services like internet access, but are starting to explore voice services, as well. "We're not just sitting around waiting for people to take our business," says Eric Rabe, Verizon's VP of media relations. "We're communicating the transformation of the company from a traditional phone company to a provider of broadband services. We've had success in selling the image of Verizon as a leader in communications technology. We can compete on brand equity and reliability any day. That's something the cable companies can't do. We're seen as much more reliable than [they are]." Sprint, which recently announced its intention to merge with Nextel later this year, will continue focusing on tech innovations and communicating that to customers, while also focusing on customer experience and reliability, says Scott Stoffel, manager of national media relations and financial communications. Playing up service Innovation is key to remaining a player, says Tyler Gronbach, VP of corporate communications at Qwest. Voice services are increasingly cheaper and are now a commodity. Data services - from internet access to television - is where competition lies. And with telecommunications and cable firms each expanding to offer increasingly similar services at competitive prices, customer service and brand will matter more than ever. "We deliver great services," says Gronbach. "But what we're talking about is the delivery of those services and the customer experience. The cable companies are marketing on speed. But people want to know whether something will work when they buy it, is it a good value, and will the company provide good service. Our motto is 'spirit of service.' We're talking about value and service, not speed." So are the wireless companies. With Cingular's acquisition of AT&T Wireless and the anticipated Sprint-Nextel merger, the big players are few and far between. But the potential for growth is still huge. Mark Siegel, Cingular's executive director of media relations, says adoption of wireless services in the US is only at 53%. "There's tremendous opportunity," he says. "That means having a clear understanding of what your key messages are and letting people know what you stand for and what distinguishes you. That's not terribly different from what we've been doing. But you are going to see more of it." The consolidation of major players doesn't mean the market will be any less crowded, predicts James Gerace, VP of corporate communications at Verizon Wireless. He notes that smaller players catering to specific interests pose a challenge to attracting new customers. And with that comes the challenge, which Gerace says has been one for the past few years, of differentiation. With wireless carriers offering similar services, differentiation is still key. But fewer big names and many smaller players catering to specific interests are making that harder. "Consolidation won't make life easier for communications professionals," admits Gerace. "What really matters to the consumer is reliable, quality service," adds Siegel. "[Without] that, all the brand identity in the world won't matter." ----------- Mobile branding A brand needs to be greater than the sum of its parts. So when Sprint and Nextel announced their proposed merger, it's understandable that the new name of Sprint-Nextel didn't exactly set the world on fire. But that name is probably temporary until the merger goes through. At which point the new entity will need to decide which company has the stronger brand or whether to go with a new brand, says Allen Adamson, MD with branding firm Landor Associates. "They made the classic first decision, which was [no] decision," says Adamson. "They made a choice to keep both names, which was prudent. But over time, they need to make a decision. The market will make [one] if they don't. Hyphenated brand names don't last." One major hurdle is bringing together a consumer-centric brand (Sprint) and a business-centric brand (Nextel), warns Roger Entner, director of the US wireless and mobile practice at analyst firm The Yankee Group. "It's the trench-coat man meets NASCAR racetrack," he says. But the brand will be decided on business goals, not whose brand is stronger, says Entner. And a new name isn't out of the question, noting the strength of the Cingular brand, a joint SBC-BellSouth endeavor. Adamson agrees that the brand needs to support the business strategy. And whichever direction the new company goes, it will have to communicate to the customers of whatever brand disappears and get them comfortable being users of the new brand. "Sprint has done well in transforming itself from long distance to wireless," says Adamson. "And Nextel has a strong brand. Both brands are viable. But they'll need to make a decision because other [wireless] providers will come after you and your customers."

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