We have developed an excellent - Teletimes

Robin BurtonOne size does not fit allIf operators are prepared to offer a flexible array of services that aretailored to individuals, they stand a better chance of increasing ARPUsand reducing churnBasic telephony services are becomingcommodities. Developmentssuch as number portabilitymean the traditional barriersthat tended to prevent subscribersswitching easily betweensuppliers have been eroded andprices have been pushed down.To make things worse, therehas been no compensation forthe lower prices in terms ofincreased subscriber usage.Mobile data held out the promiseof increased revenue for awhile. However, now the majorbenefit seems to be reaped bythe application developers andapplication store providers.Operators are increasingly beingrelegated to becoming just a ‘bitpipe’.In such a commodity market,prices inevitably tend to be low.When the average subscribersees little appreciable differencebetween different networksand their offerings, he or she isall the more prepared to switchbetween suppliers whenever,and as often, as there is a perceivedbenefit elsewhere — evenif such a benefit lasts only for ashort period.For subscribers, it’s increasinglya matter of ‘take advantageof the latest offer — and thenmove on to the next.’ And who’sto blame then if that’s how theindustry is marketing itself?A cool responseOne common operator responseto subscriber switching has beento invest heavily in branding.Unfortunately though, in manycases, such exercises have beenabout trying to persuade usersthat the services on offer arebetter than they actually are.All too often, campaigns alsoinvolve saturation advertising,sports sponsorship and ‘cool’design, with endorsementsby pop singers, film stars andcelebrities’ as other popularmethods.However, mobile phone subscribersare certainly sophisticated— and often cynical— consumers and the evidenceis that, although brandingexercises can call attention tonew players in the market, theydo little to increase usage or tobuild customer loyalty.The reality is that, in the longterm, the promotion of ‘cool’just isn’t good enough. Like anice lolly in the sun, it simplycan’t last. Fashion is, by itsnature, a transitory, ephemeral,fast and fickle thing. In otherwords, probably not the wagonto which a serious company init for the long term, would wantor ought, to hitch its star.The point is that brandingexercises can be useful, but onlyas part of a cogent strategicapproach to the market. Thebrand is the promise and oncepeople are persuaded to try outa service they must discoversubstance behind the marketingblandishments. They mustgain some genuine advantage. Ifthere isn’t any, they are going tolook for it elsewhere.Sources of advantageThe big money question, ofcourse, is how is such advantageto be delivered? After all,most subscribers will not appreciatedifferences in networkquality between one operatorand another. The plain factis that many such differencesare so subtle that, in termsof consumer experience, thegreat majority of users simplywouldn’t be able to differentiatebetween them.Meanwhile, the old notion ofcompeting on price terms is asurefire recipe for long-term disaster.In the end, pricing warsare always won by the companywith the lowest costs and deepestpockets.However, little things can meana lot. In fact, they can make allthe difference between winningor losing a subscriber. They canhelp to justify a price premiumover competitors. However,these ‘little things’ are often44 www.teletimesinternational.com15Jun - 14Jul 2011