Branding decision remains up in the air as regulatory process plays out.
While SBC awaits state and federal approval of its $16 billion acquisition of AT&T, the company also appears to be mulling its branding options.
According to published reports, SBC is considering ditching its own brand – SBC stands for Southwestern Bell Communications – and replacing it with the better known AT&T name. SBC says no official decision has been made.
However, the company has spoken highly of the value of the AT&T name.
“We value the heritage and strength of the AT&T brand, which is one of the most widely recognized and respected names throughout the world, and it will certainly be a part of the new company’s future,” said Edward Whitacre, SBC chairman and CEO in January.
Experts see the decision going either way.
“If SBC sees local as its primary importance,then AT&T may be a brand only for its enterprise services, but the merged company would still be SBC,” says Lisa Pierce, an analyst at Forrester Research.
“If SBC envisions itself as becoming a truly global player, there should be no question about taking on the AT&T name,” she says. “It all depends on what they envision themselves as becoming.”
Pierce says that if SBC truly wants to embrace AT&T’s global presence, it should also move its headquarters to the New York metropolitan region. The executive talent should be in New York or New Jersey, not Texas, she says.
“We have done some consumer perception surveys. Up to 10% still think they get their local service from AT&T,” Pierce says. “AT&T is a much stronger brand domestically and internationally.”
In the mid-1980s when AT&T divested its local properties under court order, the company put much effort into building its brand. It was forced to stop using the “Bell” name, which was synonymous with telephone service. For nearly 25 years AT&T has built and maintained its brand. Some believe it would be silly for SBC to throw that away.
“SBC has no international presence,” says Brian Washburn, analyst at Current Analysis. “If SBC replaced the AT&T brand internationally with the SBC name, it would be starting from square one.”
“The AT&T name is a great brand,” Washburn says. SBC has two choices. It will either completely change everything to the AT&T brand or use it only for specific offerings under the SBC umbrella, he says.
Washburn also questioned how or if SBC will be able to leverage the AT&T brand with wireless business users. SBC owns 60% of Cingular Wireless. Bell South owns the remaining 40%. It seems unlikely that Bell South would allow SBC to change the name of the wireless service provider to AT&T Wireless, he says.
But Washburn says SBC might be able to sell Cingular services to AT&T business customers as AT&T Wireless-branded services, similar to a mobile virtual network operator arrangement. SBC has not made any public statements about its branding plans regarding Cingular.
