• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

SBC's Question: Will It Keep AT&T Brand Alive? Famous Name Now Shows Some Signs of Age

Posted on: Wednesday, 2 February 2005, 12:00 CST

Once it was synonymous not just with reliable telephone service but with financial stability. Now the fate of the AT&T brand name rests with SBC Communications, which has agreed to pay $16 billion to buy AT&T, a company that dates to the administration of Ulysses S. Grant, the U.S. president from 1869 to 1877.

Few companies can rival AT&T's stature with consumers, businesses, in Washington and globally. When many Americans think of phones, they think of AT&T. In announcing plans on Monday to buy the venerable company, SBC's chief executive, Edward Whitacre, was diplomatic in discussing AT&T's brand. But he said he had not made a decision on whether to keep SBC's name on the front door, combine the two companies' acronyms or replace SBC with AT&T.

"AT&T is a terrific brand that will live on in a way to make us proud," he said, "and it is not going away." But he added: "We'll have to figure it out over the next couple of days."

Industry analysts said it would be reckless to let the AT&T name fade into history, even though SBC has spent millions of dollars building up its own profile, not just in the 13 states where it sells consumer services but across the United States. But while SBC, which is based in San Antonio, Texas, has tried to build awareness of its own brand, "the fact is, everyone knows AT&T," said Brett Azuma, a researcher at RHK, a telecommunications consulting firm in San Francisco. "The two biggest things SBC bought were corporate customers and a customer brand, and you don't want those to atrophy."

That brand recognition, though, may not live on without some effort, said Clive Chajet, a brand-name consultant based in New York. He said that AT&T's brand, while still vibrant, is probably better known among older Americans than among the many younger ones who do not use AT&T and instead get their phone service from wireless providers.

To that end, even the AT&T Wireless brand suffered a blow recently: the company was acquired by and subsumed into Cingular Wireless last year.

"The AT&T brand doesn't have the same kind of relationship with younger consumers as it does with older ones," Chajet said, though he added that if SBC let the brand name die, it "would be throwing money out the window."

The irony, perhaps, is that AT&T's history has been less than heartwarming at times since it was formed in 1876. While it operated as a government-sanctioned monopoly from 1913 to 1984, its stock, signified by the stock ticker symbol "T," was a stalwart with "widows and orphans" in search of steady returns.

But the company, which was really a collection of affiliates, was under constant attack and suspicion from rivals and in Congress. And while it was perceived as a steady and stable place to work, it has laid off hundreds of thousands of workers at various times dating back to the 1930s. It even lost its original reason for being, that of providing universal phone service, when the proportion of homes with telephone service surpassed 90 percent in the 1960s. Once that happened, pressure to break up the monopoly accelerated.

Yet the image of "Ma Bell", as the company was called, the technological equivalent of apple pie and baseball, endures despite the company's long decline. "No one knows where the phrase Ma Bell comes from," said Sheldon Hochheiser, who was AT&T's historian for 16 years until he was laid off last year. "But it basically was a warm, fuzzy feeling that it provided reliable service."

Source: International Herald Tribune

More News in this Category