ANALYSIS: AT&T aims to set UK phone lines buzzing

AT&T is a formidable name, thanks largely to the company’s blue-chip reputation in the US market. But it will face a tough battle with UK domestic operators

AT&T is a formidable name, thanks largely to the company’s blue-chip

reputation in the US market. But it will face a tough battle with UK

domestic operators

If AT&T’s plans to steal a slice of the UK telecommunications market

have got its rivals worried, they are trying hard not to show it.

‘This is more sabre rattling than reality,’ says BT press officer Paul


‘I remember when AT&T was promising a launch into the consumer market on

the front page of the Independent two years ago,’ he says. ‘Promises,


‘AT&T hasn’t dug a single trench,’ says another major competitor. ‘It

leases its network from another telecoms company. The UK market is one

of the most competitive. You can’t just stroll into it without a tough

fight,’ he added.

But despite the bravado telecoms operators are keeping a sharp eye on


One reluctantly admits the company’s reputation will place it near the

top of the list for business people - its first target market - who can

now pick and choose from up to 150 possible operators.

‘AT&T has got public relations down to a fine art. They practically

invented it,’ says an industry source. ‘The hype surrounding the company

is very powerful and persuasive. They have this reputation of being very

good but yet no one has any experience of this,’ he said.

This view is backed by a survey conducted by the Telecoms Managers

Association, the user group which represents the interests of its 1,300

members who havea combined pounds 3.1 billion budget.

In the survey, produced in 1994, business people rated AT&T as offering

the second best quality of service in the UK even though no one was

actually using it.

‘AT&T is seen as part of the fabric of US society and there is a

perception in the UK that the telephone system is better and cheaper

over there,’ explains one operator.

But can the image match up to the reality? The PR agency with the job of

persuading UK telecoms customers to sign on AT&T’s dotted line and not

that of BT, Mercury and Energis, is the latter’s former PR company Lexis


Last week’s news in PR Week that AT&T had shunned larger firms like

Shandwick in favour of 28-strong consumer specialist Lexis PR - agency

to KFC and Superdrug - surprised some in the PR industry.

How, they said, can Lexis hope to match the muscle of BT’s pounds 1.1

million PR spend and the weight of its eleven strong roster of PR


The answer is that AT&T is not trying to outgun BT in the mainstream but

rather to pick off small groups of key users - initially in the all-

important business market

Last year BT spent almost half (some pounds 500,000) of its PR budget

telling businesses it could provide them with wider ‘communications

solutions’. The UK giant has carved itself a very comfortable niche

offering business services like video conferencing.

Mercury, too, has ditched its moustachioed advertising ambassador Harry

Enfield in favour of a more business-focused campaign, launched in the

business section of the Sunday Times last week.

First on AT&T’s list are large multinational companies - in particular

those offering professional services, and manufacturer that rely heavily

on telephones.

But, however targeted its campaign, AT&T will still need a USP to stand

out from the ever growing crowd of telecoms operators.

In the past telecom companies have focused their marketing efforts on

price, but industry insiders agree those days are long gone.

The novelty of Mercury’s per second charging disappeared over the years

as it was adopted by most of the telecoms industry. ‘You can’t base a PR

strategy on price. The price war is now out of our control,’ says one

industry insider.

Nor can AT&T bank on being a more modern, sharper, outfit than BT as

Mercury once did. ‘The real issue in the business world is adding value

by offering problem solving solutions,’ says the insider.

AT&T’s answer is service. The company is planning to entice business

customers by offering incentives such as his or her personal account

manager and a 24-hour help line.

These service initiatives will be communicated to the potential customer

through the business, trade, consumer and regional press.

But it is the residential market where AT&T will have a tougher time

differentiating itself from regional firms like Scottish Telecoms, cable

operators who are cornering the local market and of course, BT.

Mercury’s tactical retreat from the domestic market, unable to steal

BT’s thunder, should be a warning to AT&T, whose chairman boasted of its

five year plan to capture this audience three weeks ago.

Again AT&T’s answer is targeting. The company plans to spend

approximately half of the pounds 600,000 that BT spends on public

relations to reach the whole UK domestic market by identifying smaller

key target groups instead.

The US giant is bolstering its in-house communications department, in

preparation for launch. Niall Hickey, head of press and public relations

of rival operators industry body The Cable Communications Association

will join to build relations with the UK media.

AT&T has also drafted in its first communications director: Jennifer

Samuel from AT&T system and technology company Lucent Technologies to

oversee the new department.

‘The jury is still out on AT&T,’ says a Mercury spokesman, suspicious

that the US giant will deliver. ‘But we are ready for them. We welcome

the competition’. Brave words indeed.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Already registered?
Sign in