When it comes to marketing products and services, no one does it better than AT&T. Once again AT&T, the largest US network carrier, proved with its unique and newest marketing efforts. AT&T’s marketing campaigns generated more engagement with consumers during a recent 30-day stretch than advertising efforts from any other major U.S. mobile network, according to the ad-measurement company iSpot.Sources revealed that AT&T has spent more than $109 million on video advertising and claimed 60.7 percent of all consumer engagements in the wireless industry from March 16 to April 15. Another major carrier, Verizon, spent around $41.5 million and generated 23.6 percent of all engagements between carriers & consumers while Sprint landed third, driving 9.3 percent of all engagements, spending around $38 million.
AT&T’s “Your Network” spot was “the most reacted-to” iSpot said, claiming nearly one-third of the brand’s engagement and nearly 20 percent of the wireless industry’s overall engagement. Even more surprising was the ad alone generated more than one million online views and around 14,000 social actions.
“AT&T is once again the king of wireless TV advertising, generating the vast majority of the industry’s online activity in the 30-day period tracked,” according to iSpot. “Earning nearly 61 percent of the industry’s engagement, AT&T spent an estimated $109.3 million running 21 ads over 18,000 times on national TV.”
Verizon produced and ran 12 different ads 6,933 times. “A Better Network as Explained by Ricky Gervais, Part Two” was the most popular among its produced ads. The spot accounted for 35 percent of all digital activity for Verizon, including nearly 800,000 online views and 30,000 searches.
Also, iSpot said that Sprint’s ads generated around 737 million views and the top performing ad was “How it Feels” which touts the carrier’s iPhone forever plan.
AT&T, one of the biggest wireless carrier in the US, is all geared up to begin with the preparations for the upcoming incentive auction. Again, AT&T has urged the FCC to lay a foundation for the event, saying that “strong, centralized FCC leadership on the transition will be essential.”
Later this month, the FCC will begin a “reverse” auction that will eventually see it buy back unwanted airwaves from TV broadcasters. That spectrum will then be auctioned off later this year to companies looking to use it to launch mobile communications services. The FCC has proposed a 39-month timeline for repacking, although that schedule has come under fire by TV broadcasters who say it doesn’t provide enough time.
AT&T didn’t offer an opinion on the proposed timeline in its latest filing, but it did cite the 800 MHz rebanding effort, which began in June of 2005 and was expected to take 36 months but continues today. “We also believe that there are important lessons that can be learned from other FCC projects of similar size, scope, and complexity that underscore the importance of up-front logistical and programmatic planning, careful execution, and robust program management,” wrote Joan Marsh, AT&T’s vice president of federal regulatory, in the filing. “While the 800 MHz rebanding in many ways was more complex than this effort, there are also many similarities. Notably, the 800 MHz rebanding effort began with the belief that the band could be fully re-organized within 36 months. We now know, in hind sight, that the effort will in fact take more than a decade to complete.”
AT&T went on to urge the FCC to make sure it has the resources in place to produce a detailed transition plan for comment and feedback within a few months of the auction’s conclusion. “A carefully developed and regionally prioritized plan, coupled with strong project management, is essential to managing key dependencies and to controlling constraints and challenges,” the operator wrote. “AT&T urges the FCC to utilize all means available to it to ensure that it has the necessary expertise and resources available to establish and execute on an effective and expeditious repacking plan as soon as the auction concludes.”
It is expected that AT&T would be the dominant bidder at the FCC’s upcoming incentive auction, and is even planning to spend around $10 billion on the licenses.
The two big telecom companies that are likely to be the victors in the first-quarter race to rack up new subscribers and retain the existing ones are T-Mobile US and AT&T Mobility. The forecast appears so as churn has shaped up as a key area of focus in the industry, confirms a research report from analysts at investment bank Jefferies.
The Jefferies analysts have also added in a research note that these carriers are ting subscribers at rates that aren’t very different from their historical averages. However, they do seem to believe that churn will be a crucial metric to be observed in this quarter as T-Mobile and AT&T have been showcasing better-than-expected trends recently and Sprint and Verizon Wireless are likely to report slightly higher churn.
Earlier this month, AT&T said that it hopes to add around 400,000 postpaid customers in the first quarter, which would show up as weaker performance than what they had a year ago. Yet, the carrier also expects to see improvements in its postpaid churn. AT&T said that its postpaid churn is moving lower on both a year-over-year as well as a sequential basis. The carrier’s postpaid churn in the first quarter of 2014 was 1.07 percent and 1.22 percent in the fourth quarter of the same year.
To the Jefferies analysts, AT&T appears to have gone ahead with a less aggressive stance in 1Q, seemingly preferring profitability and free cash flow to incremental market share.
As far as Sprint is concerned, the analysts seem to forecast the company to lose 355,000 subscribers during the first quarter “as the initial shock of last quarter’s promotions wears off.” Ever since Sprint launched the aggressive “Cut Your Bill in Half!” program in December targeting Verizon and AT&T, the analysts noted, both Verizon and T-Mobile have introduced competing offers. Verizon now offers two lines and 6 GB of data for $100, while T-Mobile offers two lines and unlimited data for the same amount.
The analysts also expect Verizon will go ahead adding only 711,000 postpaid customers within the first quarter, below the consensus forecast of 752,000. As per theses analysts, Verizon’s average revenue per account will fall 0.9 percent, which is worse than Wall Street’s expected 0.4 percent decline.