AT&T – T- Mobile: Hispanic marketing implications (Premium Content)

A new and important chapter in the wireless wars was written yesterday when AT&T and T-Mobile announced that the former will pay $39 billion in cash and stock to acquire the latter. The deal will combine AT&T, the second biggest wireless brand in the U.S., with the nation's fourth-largest brand. Deutsche Telekom, the owner of T-Mobile, will get a healthy $25 billion in cash, and end up with about an eight percent stake of AT&T.

AT&T’s plans to acquire T-Mobile USA could make Sprint Nextel Corp. an attractive candidate for Verizon Wireless to snatch up. If the deal passes regulatory approvals in the U.S., being acquired by Verizon may be the nation’s third-largest carrier’s only option to compete in such a consolidated environment, Arst Technica reports.

The fight for new subscribers is particularly intense when it comes to the Hispanic consumer. As it is well known, Hispanics overindex in wireless usage.

Telecommunications is by far the largest ad category in Hispanic advertising with more than $900 million invested annually. Within telecommunications the biggest category is wireless, with AT&T the third largest company in overall Hispanic ad-spend according to TNS in 2009, Verizon the 4th, Sprint the 15th, Deutsche Telekom (T-Mobile) the 16th. AT&T and T-Mobile spend well over $160 million annually in Hispanic advertising. AT&T is present in all media types, so is T-mobile who recently did a brand integration partnership with Telemundo.

It is too early to have an indication of how the purchase of T-Mobile by AT&T will affect Hispanic advertising. Obviously scale matters for negotiating deals with suppliers and also marketing and advertising. There may be some consolidation going on. Torrance, CA based Conill is T-Mobile’s Hispanic Advertising agency, while New York City based Media:edge buys media for AT&T in the Hispanic market.

Cnet has an interesting take on the transaction. In recent months, T-Mobile advertising has been laying into AT&T, criticizing the carrier for hobbling a hot phone with slow network speeds. Either that was a form of flirting, or AT&T decided it needed to silence those commercials once and for all. You see, T-Mobile seems to have spent quite a bit of time and money telling us all that AT&T's service is, well, worse than a lobotomy in the open air, without anesthetic.

You must have seen the ads. They feature a nice lady in a dress (Presumably someone demanded a slightly younger Catherine Zeta-Jones) who ridicules the allegedly tortoise-like qualities of AT&T.