BrandZ™ Category Analysis: Telecom Providers
Size matters in transition
from pipe to content brand
Size matters in the telecom provider category. AT&T, the No. 1 in the BrandZ™ telecom providers ranking, increased 1,623 percent in value over 12 years, compared with a 173 percent rise for the Telecom Providers Top 10. Both AT&T and the Top 10 declined in being viewed as Meaningful (meeting needs in relevant ways) during that period, when gaining scale required building infrastructure to expand networks and promoting multi-year contracts to gain customers.
The Telecom Providers Top 5 comprise around three-quarters of the Top 10 brand value, much the same as 12 years ago. And because of their scale, the larger telecom providers have the resources to invest in transforming from voice-and-data conduits to entertainment and content providers. The Top 5 telecom providers exceed the Bottom 5 in the key BrandZÔ metrics of Brand Purpose, Brand Experience and Meaningful Difference.
But the focus on building functionality had other consequences. Although consumers see the three most valuable Telecom Providers—AT&T, Verizon, and China Mobile—as Meaningfully Different, they declined in that metric over the past 12 years, probably because of increased completion, including challenger brands that appealed to young consumers with price-driven, pay-as-you-go options and more edgy communications.
The decline in being viewed as Meaningfully Different has leveled, however, suggesting that the strategic shift of telecom providers from voice-and-data pipes to entertainment and content brands may be gaining traction.
The major telecom providers have made significant acquisitions to transition into content and entertainment. This transition widens the competitive set. The consumer is being asked to make a more complicated choice that requires more than deciding which carrier has most reliable network for the best price. Being Meaningfully Different will be especially important because the consumer also is considering Amazon, Netflix, and another entertainment and content providers.
Top 5 comprise two-thirds of value…
The Telecom Providers Top 5 comprise around two-thirds of the Top 10 brand value, much the same as 12 years ago.
Source: BrandZ™ / Kantar Millward Brown
… and Top 5 lead in key metrics
The Top 5 telecom providers exceed the Bottom 5 in the key BrandZÔ metrics of Brand Purpose, Brand Experience and Meaningful Difference.