Download; One Cingular transition… – Company Business and Marketing
SBC, BellSouth unveil wireless joint venture identity Cingular Wireless is the latest mobile venture to take on a catchy and initially confusing name. The joint venture between the wireless units of SBC Communications and BellSouth did more than gain a new identity last week, it gained a second-place ranking behind Verizon Wireless. When the combined company received FCC approval Sept. 29, few industry observers seemed surprised. Now the question is, will wireless be the only tie that binds the companies?
For now, the focus is on establishing its leadership and integrating the companies, said Steve Carter, president and CEO of Cingular. “We intend to exploit our new scale and scope as we change from a regional mindset to a national mindset,” he said.
The carrier, which will be based in Atlanta, will have access to 70% of the U.S., giving it a lot to work with in terms of its wireless Internet strategy.
“We also intend to be a competitive and sophisticated marketer of the hottest product available today – wireless – and become a leader in wireless data apps,” Carter said.
Cingular will serve more than 19 million customers and about 190 million potential customers, compared with Verizon Wireless, which serves about 25 million customers. Considering the competitive nature of telecommunications, the merger was considered a natural fit.
“The merger was inevitable because long-distance telephony is going down the toilet,” said Tom Nolle, president of the CIMI Group. “As RBOCs get more competitive in the national market, they will be forced to do so in wireless.”
The name is derived from the word “singular,” using a C because it is different but pronounced the same, Carter said. The new wireless entity wanted to convey that it stands for the individual customer and values the unity of the joint venture.
The SBC and BellSouth properties will continue marketing under their existing names, but their 11 different brands will transform into Cingular early next year. To prepare customers for the change, the company will launch a national advertising campaign.
Although Nolle is not sure about the new name, he recognizes the challenge companies face when trying to find a unique and effective identity. “These companies are challenged to find a word that is recognizable and one that can convey meaning in the marketplace,” he said.
Carter remained tight-lipped about specific applications, saying only that developments are on the horizon. However, the two wireless players have confronted the issue of operating on different networks, TDMA and GSM, he said. To face this challenge, Cingular will offer phones that will operate across both technologies. At the end of next year, enhanced data rates for GSM evolution technology will allow the different platforms to operate as one, he added.
The carrier will roll out general packet radio service (GPRS) later this year in California, where SBC Wireless recently launched its first wireless Internet market. It will roll out GPRS in other GSM markets by late fourth quarter, Carter said.
Although SBC Wireless was considered slow in terms of bringing data services to market, Carter claims both companies agree that slow isn’t always bad.
“Our belief is that sometimes being first is not the best thing to do. Look at our competitors – there was an element of over-promise and the first applications were not killer apps,” Carter said. “We decided we will not sell data services as a substitute to PC-based Internet. They should be seen as an enhancement instead.”
Cingular will take its time preparing wireless Internet services that will be an addition to the landline Internet, Carter added. “[Wireless Internet] is like a marathon, and we haven’t even gotten 100 yards, which gives us a good opportunity.”
Another interesting issue to watch is whether this relationship grows beyond wireless, Nolle said. When Bell Atlantic and Nynex merged, they started with their wireless operations and then moved into a full merger, he said. “This [wireless merger] might answer the question: What is to happen to BellSouth, which is the only RBOC without involvement in a merger?”
Carter did not speculate beyond the wireless merger, nor did he comment about whether Cingular would spin off from SBC and BellSouth, but he said the issue was in the hands of the parent companies.
“We have the advantage of being the product of two strong parents.”
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