The WPP BrandZ™ Top 100 Most Valuable Global Brands 2018 set a record this year, increasing 21 percent, the highest year-on-year percentage increase in a decade and the greatest addition of value ever—$748 billion.
This year telecoms continued its transformational shift to data and content. And it competed with technology brands for leadership in digital connectivity. Slowing mobile growth and narrowing margins affected results, however, and the telecom provider category increased 2 percent in value,
outperforming only the oil and gas category in the BrandZ™ Global Top 100.
The most valuable brands continued to think beyond the category; as BZ reported.
AT&T attempted to acquire media giant Time Warner, which would provide a vast library of content for the DirecTV streaming service it purchased a few years ago. The US government blocked the acquisition, however, arguing that the combined company could potentially be monopolistic.
AT&T appealed the decision and underscored its commitment to transforming into an entertainment
company by relocating its entertainment division to Los Angeles, from the East Coast.
Other telecom brands also are attempting to become entertainment hubs. Comcast launched its Xfinity mobile service bundling with TV and internet. Using voice search it was and Netflix. The brand is aggregating simplicity. Vodafone, the UK-based telecom with operations in 26 countries, explored combining with Liberty Global, a giant UK-based TV and broadband entertainment company present across Europe and beyond. Japan’s NTT prepared for 5G expansion in anticipation of the 2020 Olympic Games in Tokyo. Entertainment and content were not the only spaces telecoms entered as they reimagined the category. France’s Orange, for example, launched Orange Bank in France, an effort to disrupt banking and leverage Orange’s customer base and its knowledge of online banking gained from its Orange Money operations in Africa and the Middle East.
Verizon launched a new campaign that stretches the brand beyond being a voice and data conduit, and even a content provider, to becoming a brand at the intersection of human need and connectivity, with products that focus on Smart Cities and the Internet of Things. In a project aimed
at controlling traffic congestion and pollution, Verizon is embedding sensors on roads around Sacramento, California. With a strong performance by its T-Mobile business in the US, Deutsche
Telekom, Europe’s largest telecom provider, increased revenue and profit even as it invested in preparations for 5G. France’s Orange increased in revenue for the first time in several
years. Orange expanded the number of contract customers and increased income from increased data usage driven in part by online newspaper and magazine subscriptions combined
under an offering called ePress. Driven by Spain’s recovering economy, Movistar added more high-spending customers with offerings of more data and faster speed.
Many of the telecom provider brands, including AT&T, Verizon, and Deutsche Telekom, planned to prepare their networks for 5G and even introduce their first 5G offerings in limited
markets. The advance to 5G is expected to facilitate new technologies and increase the transmission of data with the growth of the connected devices, including smart homes and autonomous vehicles. Verizon tested 5G in 11 US markets. AT&T planned to trial 5G in Texas.
Influence of regulations
In China, government directives to lower prices for data consumption and invest in 4G service squeezed telecom brand profits. China Mobile, the world’s largest telecom with 867 million subscribers, experienced additional pressure when the government permitted two state owned
competitors, China Unicom and China Telecom, to collaborate in developing 4G infrastructure. Also,
as part of the government’s reforms aimed at strengthening State Owned Enterprises, China Unicom raised private investment and changed its ownership to a state-private mix.
Indian government digital priorities helped facilitate the rise of Reliance Jio, which disrupted
competition in the second largest telecommunications market after China. Low pricing enticed subscribers to join Jio, and triggered a period of consolidation, including the merger of Vodafone and Idea Cellular, and the sale of Tata’s telecom business to Bharti Airtel. Meanwhile, Jio reported
its first quarterly profit since its launch in September 2016.
In the US, the Trump administration reversed net neutrality regulations promulgated by the Obama
administration. The revised rules, which allow telecom providers to transmit data at varying speeds,
opened the possibility that the telecoms would allocate bandwidth unevenly, favoring certain major
customers at the expense of individual consumers. The telecom providers generally supported the new rules, while assuring consumers that service levels would remain unchanged.
US TELECOM PROVIDERS GROW DRAMATICALLY IN VALUE
The US telecom providers grew enormously in value over the past 12 years, in absolute terms and relative to telecom providers in other parts of the world. In 2006, US telecom providers comprised only 13 percent of the BrandZ™ Telecom Provider Top 10 total value. Having grown 1,539 percent in value during the past 12 years, US telecom providers now comprise 60 percent of the Telecom Provider Top 10 total value.
The US telecom provider leaders, AT&T and Verizon, competed for scale, which seemed to be the most important success determinant for brands viewed as commodities. Today, AT&T ranks the No. 10 in the BrandZ™ Top 100 Most Valuable Brands, and Verizon ranks No. 12.
With more competition entering the marketplace this year from major players, conversational interfaces powered by AI will become the new communication tools for marketers to leverage in their interaction with consumers.
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