AT&T Plans to Kill Cingular Brand

But Analysts See Change of 'Cingular' to 'AT&T Wireless' as Mistake

By Alice Z. Cuneo

Published: May 02, 2006

SAN FRANCISCO (AdAge.com) -- It cost $4 billion to turn it into one of the best known names in the country, a future-forward, dynamic brand with a strong connection to young consumers and a share lead in the wireless marketplace. Yet, in 2007, Cingular will be tossed aside like an old sock.

Not only is AT&T-in the throes of acquiring Cingular owner BellSouth-planning to ditch the Cingular name and ubiquitous, sprightly orange jack, but it will replace it with its own stodgy moniker, renaming the division AT&T Wireless. Such a move could conjure up images of the rotary dial and cause so much confusion that experts estimate it may take another $2 billion in marketing expenses to explain the changes to consumers.

AT&T argues that the $4 billion spent building Cingular-it will lay out around $1 billion this year alone-won't be wasted, because, in the words of spokesman Michael Coe, it has "created a brand that has led to a customer base which is the largest in the U.S." The company also claims that the single moniker for all AT&T services will "eliminate customer confusion and make a much more elegant solution."

And certainly if consumers take to the idea of bundled service, it is easy to see where "elegant solution" comes in. It would seem logical to try to sell consumers their landline, Internet connection, cable connection and wireless service all under the same brand.

Still, many ad experts feel the success of bundling is far from a given, and that ditching the wireless brand as we enter a wireless future is the wrong approach. "To give up Cingular is a mistake," especially in favor of AT&T, "my father's brand of telephony," said Jonathan Asher, president, Dragon Rouge USA, a branding and design consultancy. "I'm not sure how much value or what AT&T brings to the party." Of course AT&T has positive attributes, Mr. Asher pointed out, like "incredible recognition, incredible heritage and somewhat reliable," but it also is "stodgy, old fashioned, big, heavy and dated."

Karl Barnhart, managing director, CoreBrand, New York, a former AT&T agency, agreed that changing the Cingular name "doesn't make sense." Cingular's brand is "relevant for the younger audience; it's a fun, hip, interesting, dynamic-everything you don't think about AT&T."

Mr. Barnhart estimates the changeover will cost "probably one-half billion per year for three to five years." And in the end, consumers still may not understand why they moved from writing a monthly check to AT&T to writing one to Cingular and then going back to AT&T, he said.

"It's the right decision to buy BellSouth," said Mr. Barnhart. "But it's a hard business decision to jettison Cingular." Could it cost them customers? "If they don't do a good job of [changing the Cingular name] consumers will jump to Verizon Wireless."

The change also comes at a time Cingular faces a flurry of emerging competition targeting the lucrative youth market from new wireless service providers such as Amp'd Mobile, Mobile ESPN and other mobile virtual network operators.

Cingular is the No. 9 mobile brand in the world, according to Millward Brown's recent global brand rankings, and has a value of $6.6 billion, just below Verizon Wireless at No. 6 and T-Mobile at No. 7. But Nikhil Gharekhan, senior VP, Millward Brown Optimor, still thinks it makes sense to hitch the wireless arm of the newly merged company to AT&T's star, or death star, as some describe its logo. Brand equity "is not wasted if there is enough marketing or communications of message so those equities are transferred to AT&T."

Susan Nelson, executive director strategy and insight at Landor, San Francisco, also espoused the view that the "somewhat damaged" and increasingly meaningless AT&T brand needs to be attached to the Cingular business for the entire company's sake. "Rebranding Cingular is not only the right thing, but probably the only thing to do," she said. "The AT&T brand didn't stand for much ... at least as a leader in telecom. If they want to make it meaningful for tomorrow it has to represent the state of the art, and the state of the art is mobile."

So far experts have been unimpressed with AT&T's $1 billion-plus campaign last winter to introduce the combination of SBC and AT&T. "It's an amateurish revision," said Mr. Asher.

The head of one wireless company joked that AT&T is spending a lot of money for virtually the same logo and a lot of lower case letters.