Brand awareness surprise: AOL emerges as potential telecom player

America Online already is a stronger brand nationally than many traditional telecommunications providers, an IDC/Link study revealed last week.

Telecom companies with ambitious plans might consider an alliance with AOL, analysts said. They also predicted that AOL will become a reseller of a wide range of telecom services that may include local and long-distance telephony, as well as wireless.

"There is nothing to stop AOL from becoming a full provider of telecom services," said Iain Gillott, director of wireless and broadband networking at IDC/Link and the analyst responsible for the study. "At some point in the future, we will see names like AOL and Microsoft offering telecom services other than Internet access."

It would be natural for AOL to tap into the local market that it helped grow, Gillott said. Because of the success of AOL and other ISPs, incumbent telcos have experienced large growth in the number of second phone lines to homes.

The IDC Brand Image Index showed that the AOL brand is stronger nationally than any of the Bell regional holding companies, GTE or Cellular One, though not as highly rated as the three major long-distance carriers.

"AT&T does very well [as a brand], and the [RHCs] do very well in their own territories," said Gillott. "Sprint and MCI do well in certain demographic groups but do not do well overall."

Ironically, AOL brand awareness among consumers skyrocketed last year when the ISP received a flood of media coverage about network access problems and user dissatisfaction. "There is no such thing as bad press," said Gillott. "Last year, [AOL was] nowhere. Microsoft was way ahead of them."

The IDC survey compared consumer buying criteria by demographic groups. IDC then developed its Brand Image Index that compares a brand with its competitors across those groups.