Verizon has been named as the world’s most valuable telecommunications brand, followed by AT&T, China Mobile, T and Vodafone. The Brand Finance Telecoms Report is an annual study conducted by brand valuation and strategy consultancy Brand Finance. The world’s biggest telecoms companies are put to the test to determine which command the most powerful and most valuable brands.
Verizon’s 74% brand value growth brings the operator’s total brand value to $53,5-billion. Rapidly rising revenues and an upgraded brand rating (now AAA-) are primarily responsible for the rapid increase in value.
The brand rating is determined by a wide range of factors on Brand Finance’s Brand Strength Index including trust, loyalty, corporate responsibility and governance.
Verizon has finally come of age, acquiring Vodafone’s 45% stake in Verizon Wireless to take full charge of its own affairs.
The deal has been a successful move for both parties; Vodafone’s $130-billion windfall from the sale of its stake has boosted its financial performance and helped increase its brand value by 10% to $29,6-billion.
Though Vodafone has performed well, its rank has slipped due to the rapid rise of T and China Mobile.
The on-going consolidation of services under the ‘T’ master-brand and a presence in the fast-growing US market has contributed to the 42% brand value increase for T.
Meanwhile, Chinese brands continue to build brand value rapidly as the country’s huge population becomes more urbanised, networked and interconnected. Both China Unicom and China Mobile are now in the top ten, with newly upgraded AA+ brand ratings and brand values of $15,8-billion and $31,8-billion respectively.
Operator brands have been overshadowed for the past few years by brands in adjacent sectors, from handset manufacturers like Apple (brand value $105-billion) and Samsung ($79-billion) to Internet services such as Google ($69-billion) and Facebook ($9.8-billion).
Many have felt exploited by the tech giants who have profited from their infrastructure without any financial contribution. With the acquisition of WhatsApp and the announcement of Internet voice calls, Facebook will now not just be piggybacking on the operators’ networks, but actively eroding revenues. The fact that Facebook represents up to a quarter of Web traffic for firms such as Vodafone will only harden their resolve.
As a result of all this, the shrewdest telecom brands are becoming more assertive. Some are taking on the Web firms directly; Netflix (brand value $3.2-billion), the largest single source of US Web traffic, has had to strike a deal with Comcast ($15.3-billion) to ensure adequate bandwidth.
Others are remoulding themselves, harnessing the power of their brands and extending their range of activities to become more than just the ‘dumb pipes’ of our interconnected world. A case in point is BT. Having invested significantly in sports TV rights, the UK’s second most valuable telecoms brand is now pursuing a “triple-play” strategy.
BT’s brand value is up 70% to a total of $15,3-billion as is its brand strength rating, which has been upgraded two notches, from AA to AAA-. Its content focused strategy, investing huge sums in Rugby and in particular Premier League football to challenge Sky, appears to be paying off.
Brand Finance chief executive David Haigh comments: “Telecoms brands have shown impressive growth this year, making telecoms the second fastest growing sector by brand value. However the fastest growing sector of all is tech. It will be interesting to see how the on-going power struggle between brands from the two sectors plays out.
“To stay on top telcos must exploit new business opportunities such as mobile payment and mobile banking, harnessing and extending their brands to create further value.”
The positions of the top five infrastructure providers are unchanged. Cisco holds onto the top spot, followed by Ericsson, Qualcomm, Alcatel-Lucent and Motorola. A 34% growth brings Cisco’s brand value total to 20,8-billion, more than the rest of the top five combined.
Alcatel-Lucent is the fastest riser of the five however. A huge, €1-billion cost cutting exercise involving management changes, asset sales and a 14% reduction in the size of its workforce has restored investor confidence. Earnings are up on last year and the share price has risen more than 200% since January 2013 amid rumours that Nokia may make a bid.
