Even companies with long-established names tied to local telephone companies are ditching their old brands in favor of futuristic monikers backed by splashy multimedia campaigns.
Those campaigns are likely to be ephemeral as companies are bought and sold and little-advertised wireless Web services begin to catch up with the heavily promoted cellular phone side of the business.
Only 390,000 consumers nationally are currently using wireless Web services, but that will mushroom to 9.5 million by 2003, believes Oliver Valente, chief technology officer for Sprint PCS.
DOMINANT PLAYER SLIPS
AT&T Wireless was the dominant player in wireless at the beginning of 1999 when it touted its flat-rate calling plans in a massive outdoor, network and spot TV campaign, but it has sunk to third, dwarfed by Verizon Wireless, an instant giant with 25.9 million customers.
Verizon Wireless was created overnight this summer by the conglomeration of Vodafone AirTouch, Bell Atlantic Corp. and GTE Corp. Parent Verizon Communications sprang into existence with a $300 million campaign created by half a dozen agencies serving merging units Bell Atlantic and GTE.
SBC Communications, in the process of merging its wireless unit with that of BellSouth, took over the No. 2 wireless spot (in number of customers) with a combined total of nearly 17 million. SBC Communications already boasts 2 million more customers than AT&T Wireless, despite the fact AT&T effectively bought 3 million new customers in mid-2000 to add to its 12 million. AT&T paid a combined $3.3 billion to Vodafone, GTE and PrimeCo PCS for customer clusters in San Francisco, San Diego and Houston, respectively.
Sprint PCS, the No. 4 wireless service provider, remains a sought-after dance partner for its all-digital network and its innovations with voice-recognition cellular telephone dialing capabilities and wireless Web services.
Sprint's $115 billion planned merger with WorldCom, months in the making, was shot down by regulators fearing the combination would dampen competition.
REACH OF NETWORK
Sprint is coveted for the reach of its wireless network and depth of its wireless Internet offerings. Sprint plays on that by touting itself in TV and print ads as the only seamless, digital wireless network versus competitors' combined analog-digital networks. Part of Sprint's healthy growth is due to its marketing alliance with Radio Shack that gives its products instant national distribution.
Not long after regulators nixed WorldCom's planned purchase of Sprint, Deutsche Telekom passed its first step with regulators in buying VoiceStream Wireless for $50.7 billion. The German state-controlled telecommunications giant could become the first foreign-owned company to own a majority of a U.S. telecommunications business. Not waiting for the deal to close, VoiceStream agreed late August to buy Powertel, giving it 727,000 customers in the Southeast.
Owning a strong presence in wireless communications has become crucial to the survival of any telecommunications giant, because of its rapid growth and the service's usefulness as a marketing lure when bundled with other services like long-distance telephone, Internet and cable TV access. That's AT&T's next game plan.
Carriers have found it difficult to keep up with demand for wireless services. In 1999, AT&T began to suffer negative consumer backlash from wireless network busy signals and from service backlogs.
AT&T SHELVES PROGRAM
AT&T late last year shelved its year-old Personal Network offer, which consolidated long-distance, wireless and calling card services on a single bill. Now AT&T is offering diverse services, cable, wireless and Internet through a single point of contact in local markets, a strategy made possible from its TCI and MediaOne cable acquisitions. A $250 million TV and print ad campaign themed "Your World. Close at Hand" supports the strategy.
"Carriers are . . . turning to bundled services with the assumption that if consumers are given discounts for taking multiple services, it will be tougher for them to walk away from any single aspect of the service; the barriers to exit will be high," says Jeffrey Kagan, Atlanta-based telecommunications analyst.
Despite current emphasis on cellular telephones, the biggest growth in wireless will be the profusion of appliances designed to surf the Web. By 2005 more people will access the Internet by a hand-held device than with a computer, experts say.
"Over the next three years there will be explosive growth of wireless Internet access from consumers," says Mr. Valente, adding that "businesses advertising a strong brand and bundling services will definitely be the levers we use to promote superior services."