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Telecoms Brand Value Study Highlights Tussle with Tech Firms

20 May 2014
This article is more than 6 years old.

Telecoms Brand Value Study Highlights Tussle with Tech Firms

The Brand Finance Telecoms Report is an annual study conducted by leading 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. Operators and infrastructure providers have been split into separate tables for the first time. With 500 operators and 100 infrastructure providers, more brands than ever have been evaluated.

The Top 5

Verizon is the world’s most valuable telecoms brand. 74% brand value growth brings the operator’s total brand value to US$53.5 bn. 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 $130bn windfall from the sale of its stake has boosted its financial performance and helped increase its brand value by 10% to US$29.6bn. In fact it has been very lucrative for the British economy as a whole; Vodafone’s recently announced huge dividend payments are likely to provide a significant stimulus to the UK economy.

Though Vodafone has performed well, its rank has slipped due to the rapid rise of T and China Mobile. The ongoing 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 urbanized, 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 US$15.8bn and US$31.8bn respectively.

The World’s Most Valuable Telecoms Brands (Top 5 Operators)

Rank 2014

Rank 2013

Brand

Country

Brand Value 2014 (USDm)

Brand Rating 2014

Brand Value change (USDm)

BV change %

Brand Value 2013 (USDm)

Brand Rating 2013

1

1

Verizon

US

53,466

AAA-

22,737

74%

30,729

AA+

2

2

AT&T

US

45,410

AA

15,004

49%

30,406

AA+

3

4

China Mobile

China

31,845

AA+

8,549

37%

23,296

AA

4

5

T

Germany

30,607

AA

9,064

42%

21,543

AA+

5

3

Vodafone

UK

29,612

AAA-

2,603

10%

27,009

AAA

For the full 500 click here. You can select by country from the dropdown menu at the top.

Operators Harnessing Brand Power to Recover Margins

Operator brands have been overshadowed for the past few years by brands in adjacent sectors, from handset manufacturers like Apple (brand value US$105bn) and Samsung (US$79bn) to internet services such as Google (US$69bn) and Facebook (US$9.8bn). 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 US$3.2bn), the largest single source of US web traffic, has had to strike a deal with Comcast (US$15.3bn) 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 US$15.3bn 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 stated, “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 ongoing 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.”

Cisco Unchallenged at the Top of Infrastructure Table

The positions of the top 5 infrastructure providers are unchanged. Cisco holds onto the top spot, followed by Ericsson, Qualcomm, Alcatel-Lucent and Motorola. 34% growth brings Cisco’s brand value total to $20.8 bn, more than the rest of the top 5 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.

The World’s Most Valuable Telecoms Brands (Top 5 Infrastructure Providers)

Rank 2014

Rank 2013

Brand

Country

Brand Value 2014 (USDm)

Brand Rating 2014

Brand Value change (USDm)

BV change %

Brand Value 2013 (USDm)

Brand Rating 2013

1

1

Cisco

US

20,784

AAA

5,315

34%

15,468

AAA-

2

2

Ericsson

Sweden

7,406

AA+

273

4%

7,133

AA

3

3

Qualcomm

US

4,337

AAA-

1,371

46%

2,967

AA

4

4

Alcatel-Lucent

France

4,331

AA-

1,963

83%

2,368

A+

5

5

Motorola Solutions

US

2,541

AA

416

20%

2,124

AA-

For the full 100 click here. You can select by country from the dropdown menu at the top.

Media Contacts

Konrad Jagodzinski
Konrad Jagodzinski
Communications Director
Brand Finance
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Florina Cormack-Loyd
Florina Cormack-Loyd
Senior Communications Manager
Brand Finance
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