AT&T today announced it will accelerate the elimination of its Cingular Wireless brand by removing the name from all in-store signage, including kiosks and point-of-sale materials in 1,800 company-owned stores. Several high-profile stores in major markets will have new AT&T signs. Over the next few months, branding in arenas such as consumer touch points, handset logos and Nascar sponsorship also will be changed.
In addition, AT&T is moving to sell all its bundled services under one roof. In some markets, AT&T plans to roll out an AT&T Experience Store.
Two rebranding campaigns
To back the changes, AT&T plans two rebranding campaigns. The first scales back the Cingular name from AT&T's marketing vocabulary and carries the tagline "Wireless from AT&T, formerly Cingular." That line replaces the phrase "Cingular is now the new AT&T." Omnicom Group's GSD&M, Austin, Texas, handled the effort.
The second ad effort repositions wireless as part of a bundled telecommunication service that will go head to head with cable companies under the tagline "Your world is wireless. AT&T is wireless," also from GSD&M. The over-arching tagline remains "Your world. Delivered."
Rodgers Townsend, St. Louis, handles business-to-business efforts for the telecom. According to an AT&T spokesman, Omnicom's BBDO, New York, the agency for Cingular Wireless, continues to handle some of AT&T's wireless work.
Savings of $2.8 billion
One of the major drivers for the consolidation is an expected savings of $2.8 billion in what AT&T is calling "related synergies with an estimated net present value." The company on other occasions has said it expects 20% of overall operating savings from its acquisition of BellSouth and complete control of Cingular Wireless to come from advertising and marketing expenses.
The moves are intended to better position AT&T for its "quad play," a bundled service of wireless, landline telephone, broadband and, in areas where available, U-Verse, an entertainment offering. Cable TV companies have a similar lineup of "triple play" services but are beginning to roll out wireless voice services through a joint venture with Sprint Nextel Corp.
In this new world of big bundles, "it makes sense to make everything under one name," said Jeff Kagan, a wireless analyst briefed on the changes by AT&T. Mr. Kagan said he expects over the next few years that 40% of the nation's telecom customers will have bundles with a traditional phone carrier and 40% to have bundles with cable carriers. The remaining 20% of the market will include customers who rely only on wireless service.
High hopes for iPhone
Meanwhile, AT&T has said it has more than 1 million prospective iPhone customers who have signed up for information about the Apple phone when it launches. Apple's Steve Jobs has said he expects to sell 10 million iPhones, all presumably customers of AT&T. It is unclear, however, how many of those customers would be gained from other carriers, and how many are currently AT&T customers.
AT&T's mobile unit needs a boost from the iPhone if it is to remain the nation's largest wireless carrier. In its most recent quarter, AT&T added some 1.2 million customers, up 18% from the first quarter of 2006, but fewer than the 1.3 million customers analysts anticipated. Its total customer base was 62.2 million. Verizon Wireless, on the other hand, added 1.7 million subscribers for a 60.7 million total. Verizon has one of the lowest churn rates in the business at 1.08%, down from 1.14% in the fourth quarter. The churn rate for AT&T's mobile unit was 1.7%.