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Mobile services: Joint troubles
(Total Telecom Via Thomson Dialog NewsEdge) Everyone wants to extend their brand into the mobile space. Internet giants Google and Yahoo! have begun to broker partnerships with mobile carriers, and brand-driven MVNOs have come to market with some unusual offers (Total Telecom, April 2006, p.30).
The danger for mobile operators is that these co-brands are beginning to usurp their own. It will be a case of working hard to get the balance right with partners.
T-Mobile was one of the first to embrace the power of Internet brands when it launched its WebnWalk service in 2005, giving subscribers Google Internet search capabilities. But the biggest winner could be the search engine.
A Best Global Brands survey, published by Interbrand, rated Google as top gainer among global brands with a value increase of 46% during the period July 2005 to June 2006. Interbrand calculates Google has a brand value of US$12.4 billion, based on net present value from earnings and forecasts, taking it to 24th place in the ranking.
The leading ICT or telecoms company was Microsoft, which came in at number two (behind Coca-Cola) with a brand value of $56.9 billion. Yahoo! came in at 55, and the six leading mobile brands were Nokia (6), Disney (8), Samsung (20), Sony (26), MTV (50) and Motorola (69).
While there is scope for mobile operators to use their brands to drive, for example, mobile data usage, they will have to take care not to lose their own identities.
Hutchisons 3 took the Internet-branded model a step further late last year when it launched its X-Series package of Internet, TV and IP voice services with partners including Google, Yahoo!, Microsoft and Skype (Total Telecom, December, p.9). Its flat-rate pricing structure has a parallel with the fixed-line Internet market, where, notes Ovum principal analyst John Delaney, [there is] no automatic visibility of the access provider brand. Mobile operators risk being reduced in role to the provider of access, he says.
You can make a business out of being an access provider, says Delaney, provided the volumes are high enough. However, this is likely to lead to consolidation in the long term. The UK, for example, cannot sustain five mobile network operators, he thinks, and probably no more than two.
But mobile providers still have some crucial assets.
First and foremost consumers will seek out a reliable network; without a good network consumers wouldnt be able to access the services they most want on their phones, says Geraldine Wilson, vice president Connected Life at Yahoo! Europe. The ability to access compelling Internet services via handsets will be [an] increasingly important factor when choosing a mobile phone or network, she adds.
Financial clout
Some operators still have plenty of financial clout to boost their brands. Vodafone spends upwards of $50 million a year on branding, says Paul Nola, account director at UK-based international marketing consultancy kae: marketing intelligence.
In fact, operators have always had to work hard to compete with the brand strength of handset manufacturers. [There is] always a larger affinity with the brand of the handset, says Delaney.
Interbrands survey describes Nokia and Motorola as turnaround performances. It says after year over year decline from 2000 to 2004, Nokia has regained its leadership position in the mobile telecom industry.
In November the Finnish vendor announced a deal to embed Yahoo!s Mail and Messenger services into its S40 series of handsets. In the past operators have been worried about brand dilution, but unless you give consumers the services they want, you are going to put your brand at risk, says Yahoo!s Wilson. By associating their brands with Internet brands, operators are able to both drive data traffic and find new and innovative [ways to] monetise content, therefore increasing their revenue too.
Nola at kae: marketing intelligence agrees: Benefits remain for both the brands and the operators who work with them in order to better target and segment through their alliance with media brands.
Some mobile services have been launched on the strength of the parents brand alone, a prime example being one of the most successful MVNOs, Virgin Mobile. Virgin is a great transferable brand, although there arent too many like it, says Nola. Disney Mobile is in a strong position too. Disneys move into the market is brand-driven and firmly based on the brands core identity i.e. family, he says.
But others have not been so successful. The second half of 2006 saw the collapse of Mobile ESPN and easyMobile, both of which were built on recognisable brands.
Nola argues that Mobile ESPN was a content, rather than brand-driven, MVNO. Content providers should be focusing on developing content, instead of getting into the delivery mechanisms, he says.
There is a market for brand-driven MVNOs, but as well as the strength of the parent brand much depends on investment, says Nola. [If you] start late and dont spend enough cash promoting and supporting it, the business is doomed.
While some MVNOs are closing down, in certain markets others are being launched. In November, a Maroc Telecom/SFR joint venture launched a French MVNO aimed at North African expats. Like similar services across Europeincluding KPNs Ay Yildiz and Frances LeFrenchMobileMobisuds offer centres on cheaper calls to North African destinations and a bilingual French and Arabic customer service system, located in Morocco.
Copyright 2007 Terrapinn Ltd
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