Telecom's expansion

Consolidation among the big telecom firms has sparked fear of a decline in consumer choices. But ever-expanding technology actually increases options.

Consolidation among the big telecom firms has sparked fear of a decline in consumer choices. But ever-expanding technology actually increases options.

One recent Sunday morning, Eric Rabe, VP of media relations for Verizon, woke up to the news that rival AT&T planned to acquire BellSouth in a staggering $67 billion deal that, if approved, would dramatically reshape the US telecommunications landscape.

Rabe quickly set up conference calls and e-mail communications with the rest of Verizon's internal PR team.

"We had a statement out that afternoon, we were on with reporters throughout the day, and we kept talking with them the following day," Rabe says. "We were all over that story."

Indeed, much of the coverage since AT&T and BellSouth's announcement has speculated on Verizon's plan for growth, including its long-intended full takeover of Vodafone.

For the companies involved, these acquisitions bring a great deal of upheaval that can challenge even veteran corporate communications pros.

"In a big merger, there are cultural, business, and brand issues," notes Rabe, adding that, at least in Verizon's case, keeping most PR in-house helps present a unified message throughout the process.

"You have to remember as regulated as we are," he adds, "everything we do gets a lot of public scrutiny and media coverage. Our tradition has been to deal with that internally and we haven't seen any reason to change."

Others - including AT&T and T-Mobile - rely heavily on outside agencies to help drive their messages through these dramatic industry changes, though T-Mobile VP of corporate communications David Beigie stresses the key is to treat everyone as an insider.

"We don't view Waggener Edstrom or Maloney & Fox as our outside counsel," he says. "We have a small, lean corporate communications team, and we stress having an integrated set of agency partners. We want everyone to have a dirty uniform at the end of the day."

Twenty years ago, the telecom industry had a stodgy reputation that extended to corporate communications. But the sector is showing impressive agility these days, as revenues shift from traditional local and long-distance phone service and into broadband, mobile data, and entertainment and enterprise content.

This means that in addition to their strong investor and government relations efforts, there's an added emphasis on consumer education and outreach as companies market a dizzying array of applications and services under one corporate brand.

"We now view ourselves as really a mobility company, as opposed to a traditional telecom," explains Bill White, acting SVP of corporate communications for Sprint Nextel, which was created after the December 2004 merger of the two companies. "But with the breadth of services we offer, the real challenge is to deliver very simple, focused messages,
because if you're not careful, you end up diluting your message."

White says Sprint Nextel has been able to maintain that consistent messaging in part by moving much of its communications in-house. "The merger gave us a lot of talent," he says. "We've really tried to focus on having very direct corporate and product messages."

Today's phone company

John Metzger, CEO of Metzger Associates, has been doing telecom PR for 20 years and says much of the current focus is getting the public used to the concept that the telephone companies they grew up with no longer exist.

"Many of them are becoming more like entertainment companies, which is very different," he says. "They have huge cultural and branding shifts they need to communicate to the public."

Part of this can be seen in a shift from tech-heavy "speeds and feeds" stories or even customer-service-centric business pieces, and into more consumer lifestyle.

"The media, frankly, have shifted with us," notes Rabe. "The Wall Street Journal used to have reporters to cover each of the telephone companies - now it has reporters who cover phone companies and people who cover cable and the Internet."

More to choose from

The union of AT&T and BellSouth - which, among other effects, will see the demise of the heavily invested-in Cingular brand - comes on the heels of other mergers in previous years. It quickly triggered concerns that the industry may be looking to recreate the climate of two decades ago before the court-ordered break-up of AT&T into seven "Baby Bells." However, technology, including the growth of wireless and broadband, as well as the potential of voice over Internet protocol (VoIP), has increased consumer choice.

In wireless, for example, the public can choose not only from the major wireless telecom operators, but also from numerous mobile virtual network operators (MVNOs), such as Virgin Mobile, that contract spectrum from the major carriers and then package them with different business models, content, and branding.

Anne Green, SVP/GM at CooperKatz & Company, which represents Virgin Mobile, says the company was formed out of a joint partnership with Sprint, but essentially operates independently and is among the top 10 wireless providers.

"The larger telecoms are, by necessity, all things to all people," she says. "But Virgin Mobile was a real pioneer in the pay-as-you-go category and is very much a youth-market play. On the PR side, that's really allowed us to differentiate."

What drives much of current telecom PR isn't managing the consolidation of a mature sector; it's the realization that the industry may be, if not its in infancy, then certainly its adolescence, in terms of what it can eventually offer consumers.

"It's certainly fun to work in this industry because the opportunities are enormous," says T-Mobile's Beigie. "It allows us to look ahead and see nothing but open fields."

"In a lot of ways we're still at the ground floor," adds White. "There's a lot coming in the next year and a half. You'll start to see partnerships with cable companies. It may get to the point where a lot of things, including how Wall Street measures telecom, may have to change."

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