U.S. Telco Brand Image
Verizon is again top U.S. telco brand; AT&T falling behind T-Mobile
According to Brand Finance’s new rankings, Verizon recently widened its lead over AT&T as the world’s most valuable telecoms brand. The firm reported Verizon’s brand rose 8% in its rankings to a value of $68.9 billion.
For the second year in a row Verizon has claimed the title of the world’s most valuable telecoms brand following an 8% increase in brand value to US$68.9 billion. This brand value growth has not only propelled it back into the top 10 most valuable brands globally in the Brand Finance Global 500 2021 ranking, but has meant the brand has continued to widen the lead over second placed AT&T (brand value down 13% to US$51.4 billion). 15 further US brands feature in the Brand Finance Telecoms 150 2021 ranking, with a combined brand value of US$182.8 billion.
Two years since the beginning of Verizon’s business transformation program, Verizon 2.0 – focusing on the transformation of the network, the go-to-market, the brand, and the culture of the business – the brand continues to make leaps and bounds across the industry. The giant is widely recognized to have the best-in-class network and the widest coverage in the US, with the network’s usage surging during the pandemic, handling a staggering 800 million phone calls and 8 billion texts per day.
Meanwhile, Cowen and Company sees T-Mobile overtaking AT&T to be the second most popular telecom brand after Verizon. Cowen analysts conduct quarterly surveys of mobile customers, asking them to rank providers for “overall brand/image.”
In the 4th Quarter of 2020, the perceived difference between T-Mobile and AT&T was at its narrowest point since they started conducting their survey. As per the chart below, there was only a 0.06 difference between the two brands (we do not know how Cowen calculated the Rank Spread).
Cowen stated this brand perception issue will be an important to watch during 2021 because “network quality/coverage has historically been one of the main reasons for subscribers to leave their current wireless provider and likely a key driver of brand perception.”
The Cowen Telco Perceptions report (clients only) comes months after T-Mobile boasted that it surpassed AT&T in terms of total number of mobile phone customers.
Analyst Craig Moffett was shocked with AT&T’s $23.4 billion spent at the recently completed C-band auction. He wrote in a note to clients:
“At $23.4B, AT&T spent more than would have been expected a month ago, but expectations for their spend had been rising (notwithstanding the fact that they have only financed half of what they bought, and even that with only short-term debt), so the surprise may not be large there, either. But again, it’s a shock to see the number.”
“AT&T emerges from the auction with leverage of 4.1x EBITDA (assuming all debt financing). Can their dividend be sustained?”
AT&T bought 80 MHz of C-band spectrum in almost all of the top 50 U.S. markets.
How will they be able to finance the buildout of their 5G network to deploy that spectrum?
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