Warning to Whitacre: Don't dump AT&T name

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There's a simple reason why empire-building SBC chief Ed Whitacre should put the AT&T name over his door, and it's not just that he paid $16 billion for it. AT&T still has meaning for the man on the street.

Experts feel that for all its old-world, rotary-phone connotations, the consumer still has stronger emotional connections to Ma Bell than to Mr. Whitacre's own bland acronym. Once the purchase is complete, they say the combined company should be called AT&T, not SBC.

strong brand

Steve Kirkeby, senior director of telecommunications, J.D. Power and Associates, has studied their respective reputations: "AT&T has a very strong brand image in all residential studies, particularly in our local service studies," he said. In the North East, California and Texas, the AT&T brand "has more cachet than SBC," he added, even among SBC customers.

The difference between AT&T and SBC among business consumers is not as dramatic as it is among residential consumers. Although it may seem counterintuitive, he said "SBC has a better brand at the high end." But to the man on the street, SBC doesn't "mean anything."

The iconic AT&T lost some of its luster last year when it withdrew from the consumer market. Its reputation also suffered from poor customer service at AT&T Wireless, after that part of the company had been sold off but held onto the name.

But AT&T's residual patina of reliability and trust may be just what telecom needs as technology moves into an era of convergence in which consumers-not just businesses-will entrust the information now on their home computers to far-off networks. "As soon as all the data is in networks, the big issue will be security, trust and reliability," three AT&T brand strengths, said an AT&T-affiliated employee.

Mr. Whitacre has shown signs of agreeing with such right-brain thinking, promising that the acquired moniker will survive in some guise. But his track record says otherwise: As he gobbled up phone companies to form what will become the nation's biggest telecom firm, Mr. Whitacre buried their brands. In California, he killed Pacific Bell and forced the renaming of San Francisco's baseball stadium as SBC Park, setting off an uproar that led some of the city's legislators to try to rename the park after Willie Mays.

options

Mr. Whitacre might choose to keep the SBC name and maintain the AT&T name on its successful business-to-business operations. He could also move to an AT&T/SBC combination-although that is a "no-equity compromise which doesn't speak to the future of the brand," said Hayes Roth, VP-worldwide marketing, WPP Group's Landor Associates.

He could also ax both the AT&T and SBC brands and develop a name with which to signal a forward-looking direction for SBC, said Jean-Louis Dumeu, worldwide chairman and CEO, FutureBrand.

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