AT&T Leads in Brand Equity but is Vulnerable to the Regional Bell Operating Companies; New IDC/LINK Brand Equity Study Defines the Dynamics of the Consumer Telecommunications Market in the United States

Business Wire, June 4, 1996

FRAMINGHAM, Mass.--(BUSINESS WIRE)--June 4, 1996--AT&T leads all telecommunications brands for brand recognition and brand affinity, but is vulnerable to other brands, especially the Regional Bell Operating Companies (RBOCs), according to a new study from IDC/LINK.

In a ground-breaking study of telecommunications brand equity, IDC/LINK conducted a survey of 1,250 U.S. households exclusively devoted to consumers' branding perceptions and service bundling preferences.

"In the next few years, brand equity will become the single most important key to success in consumer communications," said Iain Gillott, research manager of IDC/LINK's Wireless Communications Research. "While few would argue that AT&T is in a strong position, this research proves that other brands can make in- roads to their domination."

IDC/LINK has identified two proven means of improving brand position. The first is through bundling or one-stop shopping. The second is budgeting, or the provider's ability to offer competitive pricing. How a service provider builds its identity around the "3 Bs" - branding, bundling, and budgeting - is key to successful competition in the U.S. and global telecommunications market. IDC/LINK believes consumer preferences for one brand, a particular category of carrier, or prejudices held from previous associations, are critical controlling factors for the growth or shrinkage of service providers' market share.

While branding is an effective tool for building corporate identity, market perception of specific product offers can operate independently of corporate identities. For example, differentiated levels of customer satisfaction can indicate competitive opportunity. In studying consumers' satisfaction with various telecommunications services, voice mail demonstrated the highest average satisfaction score for all telecommunications subscribers, and was the only service in which no subscriber indicated any dissatisfaction. The next highest grouping of satisfied subscribers included long distance, local telephone, and satellite TV.

This new IDC/LINK research, Telecommunications Brand Equity Study, targets residential users of various telecommunications services including: long distance telephone, cellular, paging, cable TV, satellite TV, voice mail, and on-line services. The objectives of the study were to determine, for telecommunications services and providers, consumers' buying behavior, switching behavior, branding perceptions, and service bundling preferences. Each service was also examined in terms of a gap that exists between the percentage of subscribers who assigned importance to a specific service and the percentage of those subscribers who indicated satisfaction with service attributes. The study surveyed 1,250 residences across the United States in the first quarter of 1996. Consumer focus groups were conducted in April 1996 to qualify the findings of the telephone survey.

This study is available for purchase by contacting Cheryl Toffel at (800) 343-4952. For additional information about IDC/LINK's Telecommunications programs, please contact Elizabeth Freedman at (508) 935-4764.

About IDC

International Data Corporation is the world's leading provider of information technology data, analysis, and consulting. With research centers in more than 40 countries and more than 300 research analysts worldwide, IDC is uniquely positioned to provide a global perspective on IT market and technology trends.

IDC's subsidiary, IDC/LINK, specializes in the convergence of the information, telecommunications, personal computing, and electronic entertainment industries.

Based in Framingham, Mass., IDC is a subsidiary of International Data Group (IDG), the world's largest publisher of computer-related information and the leading global provider of information services on information technology.

Additional IDC information/copies of recent news releases can be found on IDC's home page (http://www.idcresearch.com). -0-

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CONTACT: Elizabeth Freedman, Group Marketing Manager

Phone: (508) 935-4764 -- Fax: (508) 935-4015

Internet: bfreedman@idcresearch.com

or

Iain Gillott, Research Manager, Wireless Communications

Phone: (512) 469-5591 -- Fax: (512) 469-5592

Internet: igillott@idcresearch.com