Perhaps more than any other industry, the telecommunications category has undergone dramatic change over the past few years.

That change is driven by a myriad of factors including technological disruption, mergers and acquisitions, new over-the-top business models and increased competition from companies both within and outside the category, all of which are having a major impact on what telecoms sponsor and what they seek to accomplish.

Below, five trends to consider when working with companies in the telecom category.

Trend #1: Wireless and pay TV are now one category

In the not too distant past, rightsholders approached wireless and pay TV as two distinct categories. In most cases, a telecom owned the wireless category, while a pay TV company owned the cable category.

Fast forward to the present, and the line separating those categories has become increasingly blurry. Cable companies now offer wireless service, while wireless carriers are beginning to offer pay TV.

Case in point: T-Mobile this year plans to launch a pay TV service following its acquisition of Layer3TV, a broadband cable provider.

At the same time, cable companies are adding wireless to their bundled product offerings. Comcast in 2017 launched Xfinity Mobile in a handful of markets, while Charter Communications and Altice USA are expected to roll out their own wireless products in the first half of 2018.

The companies offer the services via MVNO agreements with wireless services providers. Comcast, for example, runs Xfinity Mobile on Verizon’s network, while Altice is expected to use Sprint’s network.

Telecom and pay TV companies are launching the products to enhance their existing offerings, gain new customers and access a new revenue stream.

T-Mobile, for example, will use its new pay TV service to bring its wireless and media offerings closer together (the company bundles Netflix with its multiline unlimited data plan), while Comcast uses Xfinity Mobile to attract and retain customers through bundled packages that include phone, internet and TV.

Trend #2: Telecoms are now digital media companies

Looking to unlock a new source of revenue amid a saturated U.S. wireless market, telecoms are acquiring digital media companies to build audience, drive engagement and, ultimately, advertising revenue.

Verizon is leading the charge on the acquisition front. The telecom in 2017 combined AOL assets with its new Yahoo assets to create Oath, a content company that owns Yahoo!, the Huffington Post, Rivals and other online destinations.

Not to be left out, AT&T plans to expand its content offerings through its long-awaited (and long-contested) merger with Time Warner.

Verizon—and presumably AT&T when the Time Warner merger goes through—look to leverage sponsorship to build their digital audience through unique, one-of-a-kind content.

Trend #3: Growing interest in sports media rights

Telecoms look to build their digital audience via exclusive content. And some companies look to acquire streaming media rights as a part of sponsorship packages.

Verizon, for example, gains the right to stream NFL games on Yahoo! Sports, its Go90 video streaming service and other digital media brands as part of its recent contract extension with the pro sports league.

Unlike its earlier deal with the NFL, the streaming rights are not exclusive, meaning people with other wireless service providers can access the content on Verizon-owned apps and content sites via their mobile phones, thus helping Verizon build audience among both customers and non-customers.

The strategy puts Verizon in the same league as Amazon, Facebook, Google and other technology companies, many of which are using and/or exploring sports media rights to engage and (further) monetize their audiences.

Trend: #4: Reward programs are hot

Wireless service companies are increasingly using rewards programs to retain customers and reduce churn, with nearly every company using sponsorship to access tickets, experiences and other perks that can be shared with customers.

Verizon, for example, leverages music (Lady Gaga) and sport (the NFL) to access backstage passes, tickets and other perks for its new VerizonUp rewards program.

The telco also is leveraging the NFL to access experiences at the Super Bowl, Pro Bowl and the NFL Draft. The strategy also trickles down to team deals: Verizon is increasingly looking to access experiences (access to training facilities, etc.) as part of contract extensions.

Verizon also uses the rewards program to drive advertising revenue. Customers who sign up for the service must share their web browsing history, location data and app usage, which Verizon can then use to serve targeted ads.

Trend #5: Video viewing trends create new sponsorship category

The growing number of consumers watching TV over the internet has created a new category to pitch: over-the-top streaming services.

Roughly 82 percent of U.S. homes receive broadband internet, up from 76 percent in 2012, according to the Leichtman Research Group. The number of consumers with pay TV continues to decline. Roughly 405,000 subscribers canceled their pay TV service in 3Q 2017, according to the firm.

And a growing number of companies are using sponsorship to promote their streaming services and drive consumer engagement.

Major League Baseball secured YouTube TV as presenting sponsor of the 2017 World Series. The partnership provided exposure for YouTube TV across MLB’s digital and broadcast channels while providing the league a new platform to engage fans.

YouTube activated the partnership with original World Series-themed content, inside-the-ropes commentary from MLB athletes and YouTube personalities, and a national promotion that dangled a VIP experience at the World Series, among other activities.

Other brands in the streaming TV category include AT&T Now, Dish Network’s Sling TV; Hulu’s live TV service; Sony’s PlayStation Vue; and Philo.

Four Rewards Programs In The Telecom Industry
AT&T Thanks
Live Nation
AT&T in 2017 partnered with Live Nation to offer presale tickets through its AT&T Thanks customer appreciation program. Other customer incentives include two-for-one movie tickets and special content for DirecTV subscribers.
O2 Priority
O2 Arena, Rugby Football Union, O2 Academy music venues
O2 leverages The O2 Arena and other sponsorships by providing priority members the opportunity to purchase tickets before the general public, access to exclusive lounges, discounts on food and drink purchases and other perks.
Sprint Referral Rewards
Prince Royce
Sprint leverages its partnership with singer/songwriter (and former employee) Prince Royce by offering Sprint Referral Rewards members limited-edition wallpaper, autographed pictures, concert merchandise and other items. Customers earn points by making customer referrals, connecting with Sprint on social media, visiting Sprint.com, watching Royce videos and other online activities.
T-Mobile
T-Mobile Tuesdays
T-Mobile leverages sponsorship assets in support of its T-Mobile Tuesdays customer appreciation program. The company in 2017 gave customers a year’s free subscription of MLB.TV and MLB.com gift cards.