Deutsche Telekom ranked Europe’s most valuable telco brand

Deutsche Telekom, T-Mobile, brand

Deutsche Telekom has again been ranked as Europe’s most valuable telco brand, as Brexit hit the performance of UK-based operators.

Brand Finance’s annual list, as revealed today by European Communications, also shows that AT&T displaced Verizon to become the most valuable telco brand in the world.

Deutsche Telekom increased its brand value by 10 percent over the past 12 months to $36.4 billion, as its “T” brand came ahead of Vodafone, Orange, BT and Sky in Europe.

However, Vladimir Dimitrov, Consultant at Brand Finance, said the Germany-based operator had its US subsidiary to thank for the year-on-year rise.

“The 10 percent increase in value for ‘T’ came largely as a result of higher revenues and increased market share in the US market,” Dimitrov said.

“In the third quarter of 2016 the brand added around 969,000 postpaid subscribers, dwarfing both Verizon and A&T which added only 200,000 and 450,000 respectively.”

The two more established US operators continue to lead the industry when it comes to brand value at a global level, however.

AT&T displaced Verizon as the world’s most valuable telco brand thanks to its recent M&A activity.

Its brand value increased by 45 percent to $87 billion, dwarfing Verizon’s $65.9 billion, which registered a more modest rise of four percent.

Dimitrov said: “Although 45 percent is a considerable increase in brand value over one year, it is worth mentioning that the main reason for that was the rebrand of DirecTV, which is now brought under the AT&T umbrella.”

China Mobile held onto third spot in the global ranking, despite its brand value falling six percent to $46.7 billion, ahead of Deutsche Telekom in fourth.

Deutsche Telekom's Head of Branding, Hans-Christian Schwingen, commented: "Since its relaunch in 2008, the brand has seen continuous growth in value, increasing by an impressive 309 percent."

Xfinity, Vodafone, Orange, NTT and Softbank rounded out the global top 10.

While Orange saw its brand value jump 13 percent to $21.5 billion, its UK-based rivals all suffered reverses.

Sky fell six percent to $10.4 billion, Vodafone dropped 22 percent to $21.8 billion and BT was down 38 percent to $11.4 billion.

Brexit is partly to blame, according to Dimitrov.

He said: “The two main factors driving the drop in all UK brands this year were the depreciation of the pound against the dollar and the uncertainty around the whole event which impacted the discount rate we use for the UK market.

“This means that expected future earnings are more heavily ‘discounted’ to account for the risk of economic turmoil of one kind or another.”

Looking forward, Dimitrov thinks Ireland’s eir is one to watch over the next 12 months.

“The brand has had another very successful year and is on track to enter the global top 100,” he said.

“It has adopted a similar strategy to some of the bigger players by launching eir sport channel.”

But he noted: “The brand still lags behind in terms of brand strength and as a proportion of the total enterprise value is still underperforming.”

Click here to see the full Brand Finance ranking, which includes data from companies across all sectors.

The full telecom listing will be available in the Q1 issue of European Communications magazine. Click here to subscribe.

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