100 LEADING NATIONAL ADVERTISERS; NEW RULES FIRE UP AD JOUST IN DONNYBROOK AMONG TELCOS

By Published on .

The long-distance telephone megabrand wars-a battle royale in which the big three carriers boosted media advertising 40% to a collective $1.21 billion last year-seems lightweight compared with events unfolding around U.S. telecommunications policy changes and exploding new technologies.

AT&T Corp.'s move to split into three companies to become nimbler as it moves into local phone service accentuates the breakup and convergence of markets and players about to take place.

The new regulatory environment will allow local providers to offer long-distance service at the same time as cable TV operators and utilities move to horn in on telephone service.

Telecommunications companies are expected to diversify into TV programming, home security and home grocery delivery, among other services.

The information superhighway looms large in plans of all providers. Most Baby Bells are offering or plan to offer World Wide Web sites, while linking with other providers of content services.

MCI added to its networkMCI presence on the Internet in March, introducing internetMCI, a software program ($99 plus $50 monthly) offering e-mail and Internet access primarily to business customers. This fall, MCI will link those services with News Corp.'s consumer-oriented Delphi Internet Services Co. on the Web, targeting an estimated 200,000 subscribers with a new combination of interactive services.

Sprint this summer began to promote its long-distance services on the Web, and is exploring other channels to use the Internet to market its core long-distance business. It has yet to delve into selling Internet services.

AT&T Corp. has purchased several independent online operations, including the business publishing platform Interchange Online Network. AT&T also owns 100% of interactive videogame service ImagiNation Network, and continues to offer Internet access and e-mail services.

In August, AT&T unveiled WorldNet Services, packaging together several substantial Internet-based services for businesses.

Despite the hype surrounding new services and technologies, basic long-distance service remains the backbone of the three major carriers.

Enormous ad spending by AT&T, Sprint and MCI is required to maintain share in the market, which remains generally steady.

AT&T continues to milk its highly successful series of "True" long-distance products and services. A new brand positioning is in the works for 1996, but the True campaign continues to yield new opportunities. This fall, AT&T will promote fresh price cuts under the new "True Reach Savings" program to counter price competition from MCI and Sprint.

AT&T also will begin marketing consumer cellular and paging services under its brand this fall, finally bringing its acquisition of McCaw Cellular Communications to fruition.

On the business side, AT&T stresses size, strength and reliability of long-distance service to keep winning major corporate contracts. The plan includes making more inroads into the market for local business service in 1996.

MCI seems to have lost its way, vacillating between directing harsh ads at AT&T's "True" claims and attempting to resurrect a once-mighty "Friends & Family" calling plan. For the first time, MCI has resorted to heavy direct mail win-back efforts, offering consumer cash incentives to switch.

MCI still managed to add a percentage point to its market share, but at crippling costs. Anticipating losses, in August MCI announced a layoff of 3,000 people in its 45,000 workforce.

This year's simple Sprint Sense calling plan, designed to give consumers a simple, flat rate of 10 cents per minute, has helped buoy Sprint's image. The underdog has managed to keep its market share without overspending on marketing, apparently winning some of the 0.4 share points lost by AT&T in 1994.

Concentrating its efforts around that program, Sprint continues to rely on clever usage of its celebrity icon Candice Bergen.

Sprint concentrates on building its consumer, business and Sprint Cellular business in the U.S., while steadily increasing share overseas.

After surviving one of the bloodiest of advertising wars, Sprint may end up a winner in the complex telecom revolution by keeping it simple.

In this article:
Most Popular