Verizon, AT&T, T-Mobile Brands Need Reinvigorating: Jeff Kagan

Jeff Kagan  |

Image source: metamorworks / iStockphoto

At this year’s annual Goldman Sachs Communacopia conference, and frankly from many other recent appearances, top executives from most communications companies said they are in a period of transition from who they were, to who they will become going forward. Let’s explore what this means to customers, workers and investors.

First of all, this is not really news. CEOs of companies like this have been saying they are in this massive transformation period for many years already. Some have been changing for most of the last decade.

Wireless carriers need to reinvigorate their brands

Wireless companies have all gone through amazing levels of change, but they have done little to reinvigorate their brands during the last decade.

This is something that needs to happen if they intend to continue to lead the once-in-a-generation transformation of the way we do things as a society.

These companies are still strong, but their brands do not look forward into the world we are moving. That is what needs to happen. They need to reflect the energy we see as our world continues to move ahead.

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We have seen so much change over the last decade from every player that it frankly makes your head spin. Yet the brand relationships with the customer, worker and investor has changed little.

So, let’s take a closer look at some of the major players in wireless and the transformation of the industry.

This column will focus on the top three wireless carriers, Verizon, AT&T and T-Mobile.

Verizon and Verizon Wireless brands need reinvigorating

New Verizon CEO Hans Vestberg is trying to fix the problems the company has faced over the last decade. To date, I like the moves he is making and hope he is successful.  

Verizon was always a leader in wireless and telecom. Seeing how their competitors were changing, they tried to take their own road. Something which did not end so well.

They went off track and ended up lost and struggling for quite a few years. As exhibits A and B, look to the acquisitions of Yahoo and AOL. Verizon thought these would help propel the company for growth going forward.

The problem was that Yahoo and AOL were no longer on the growing side of the growth curve I often discuss.

Rather, those companies had already seen their brightest days. They had crested years ago and had been on the decline for longer than most can remember.

The chance of Verizon reigniting excitement and growth with these laggards was not good at all.

Finally, under new CEO Vestberg, this wrong path was ended. He cut them loose and is working to bring the glory to Verizon back again.

During the last decade of struggle, the Verizon brand has been through the ringer. It is old and tired.

There is nothing exciting about the Verizon brand. That needs to be reinvigorated.

AT&T, AT&T Mobility brand needs to be reinvented

While AT&T has not been asleep at the wheel during the last decade, even its bold moves have proved to be a dead end. In search of growth, AT&T followed Comcast Xfinity but could not keep up with the pace of change.

You see, Comcast Xfinity acquired NBC Universal, and this match-up has been successful in its first few years.

So, AT&T tried to take on this same model by moving into pay TV first with Uverse, then by acquiring DirecTV, then Warner Media which included Warner Brothers, CNN and so much more.

During recent years AT&T held its annual analyst meetings at Warner Brothers Studio in Hollywood. While this was exciting, it also felt like AT&T was out of sync. The company tried its hardest but just couldn’t make it happen.

In fact, this AT&T dead end looked familiar. Do you remember when roughly 20 years ago, AT&T CEO John Armstrong acquired TCI, the largest cable TV company in the country? For a brief and shining moment, AT&T was bigger than ever.

Then the bubble burst, and AT&T collapsed. The company sold its cable TV operation to Comcast and was ultimately acquired by SBC, the baby bell out of San Antonio, Texas. The new AT&T once again grew and became a real player in the wireless and telecom industry.

Then, in search of growth for their shareholders, AT&T once again bit off more than it could chew.

Now, under new CEO John Stankey, AT&T is spinning off these companies and focusing on its core wireless, telephone and Internet businesses.

I like this Stankey move. This is the right move.

AT&T needs to cut costs with scalpel, not chain saw

The only problem is the financial losses AT&T is dealing with are causing it to make massive cuts in expenditures. This will very likely cause more damage to the company and brand in the next few years unless it makes changes going forward.

The solution is to trim the budgets with a scalpel, not a chainsaw. If the company carefully cuts at expenses, it will be more successful and recover much more quickly.

If it continues to cut everything in sight with a chainsaw like the creature from the Halloween movies, however, this painful transition will drag on much longer than it has to.

AT&T has been through the ringer during the past decade. Its brand is battered and tired. It needs to refresh its image in the marketplace for customers, workers and investors.

T-Mobile updated its brand, but future growth remains in question

T-Mobile has been through the ringer also. Today, it is stronger than it has been in a decade, but growth going forward requires both vision and execution. So far, under new CEO Mike Sievert, the company continues to show strength, but there is a question regarding growth going forward.

Previous CEO John Legere saved the company. It was crashing and burning as the industry changed from 2G to 3G. T-Mobile sat this change out. That was when the first iPhone and Android hit the marketplace, and everything changed virtually overnight.

At that time AT&T and Verizon were rocking and rolling, holding the vast majority of wireless market share. Even Sprint moved to 3G and was doing better than T-Mobile.

That was when T-Mobile was hanging on for dear life.

Legere saved the company. The transformation was good, but now that Sievert is CEO, he needs to continue to show strong growth.

So far, he is maintaining the company's position, but sustainable and strong growth going forward is always the question.

I still like T-Mobile and hope it continues to grow. We’ll just have to keep our eyes on the company as the entire wireless industry is changing.

Going forward, T-Mobile needs to update its brand messaging to the changing wireless marketplace.

5G Wireless going through massive transformation and reinvention

While all three major wireless carriers are strong today and are at the center of the wireless universe, they all need to reinvent and refresh their brand relationship with the marketplace.

Today, the wireless carriers have tired brands which do not look forward. They all need to be reinvented.

As time passes, every brand needs to be updated so it is not left behind. The wireless industry will continue to move forward and show growth as other industries transform and go wireless as well.

As the world continues to change, therefore, wireless must also continue to change.

In that world, the meaning of the brand and the brand relationship must embrace this change and help each company move into tomorrow.

That’s what is missing today.

We need to see the wireless brands of these companies upgraded and refreshed to reflect how the world around us is changing and how they are at the center of this new universe.

 

Jeff Kagan is an Equities News columnist. Kagan is a Wireless Analyst, Technology Analyst and Commentator who follows Telecom, Pay TV, Cloud, AI, IoT, TeleHealth, Healthcare, Automotive, Self-Driving cars and more. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan and on LinkedIn at www.linkedin.com/in/jeff-kagan/.

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Equities News Columnist: Jeff Kagan

Source: Equities New

DISCLOSURE: The views and opinions expressed in this article are those of the author, and do not represent the views of equities.com.


The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

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