Telecommunications companies (telcos) need to double their budgets if they are to compete with brands such as Yahoo! and Google, according to a new report.

Research conducted by Ovum has warned that premier brands such as the leading search engines and e-brands such as Apple are leading the field in a market which will become ever more important to the telcos sector. writes that the most innovative marketing techniques over the past few years have come from sites such as YouTube, MySpace and eBay, leaving behind the more commodities focussed engineering-based industry.

Mike Cansfield, telecoms strategy practice leader at Ovum, told the website: "Branding will become critical in the battle between telcos and premier e-brands."

He added: "As new entrants can offer services as easily as traditional telcos and the range of services increases, the importance of having a trusted brand will rise. Telcos need to become the brand of choice rather than of necessity."

Yahoo! announced recently its decision to merge its search and display marketing departments, with the company hoping that the new structure will allow for a more streamlined marketing process for customers.

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