How important is a company’s brand?

“The mobile network operator is in danger of becoming a commodity provider, so brand is important to them. It is always very important where there are intangible products or service offerings,” argues Paul Haugen, executive creative director at Burson Marsteller Europe.

As this suggests, mobile operators want to do much more than provide a pipe. Orange, for example, wants to provide a “customer experience that is ‘straightforward, honest, dynamic and refreshing’,” according to Richard Brennan, executive vice president of brand, marketing and products at Orange. The aim is to boost ARPU by selling not just connectivity, but highly personalised information and entertainment services that customers can access anywhere. Brand is how Orange – and its competitors – aim to make these services feed into their revenue stream, rather plump up non-operator profits.

“Branded products can command a higher price; people pay for the reassurance. I don’t think most consumers would want to buy Bob’s Telecom,” says Haugen. “A good brand is nothing but shorthand for a bunch of promises. It is usually service where a product lives or dies. A bad product is one that makes promises and doesn’t deliver,” he adds.

“Our brand delivers tangible customer benefits that differentiate,” says Brennan, highlighting the issue that many people consider key to decide who will make money from mobile services – ie who will stand out.

“50 Kbytes is just 50 Kbytes to the network … Packaging and pricing those 50Kbytes in different ways allows the operator to address different needs – and also to create them,” says Mike Pulley, call-channel offering manager at the consultants, AMS. This sort of segmentation, however, is not something operators can do alone.

“The interesting thing in the mobile space is the difference between handset manufacturers and mobile operators. Up to now, consumers have primarily bought handsets. However, if networks get it right, it is not inconceivable that consumers will choose a phone based on a network. There is an interesting tension there,” points out Haugen. Orange is not the only operator keen to ensure that its customers buy an Orange experience, rather than someone else’s brand. “The handset could become part of the overall product bundle, eg Vodafone customers buy what is perceived as a Vodafone handset. We will see a lot of aggressive deals on this in the next 12-18 months,” says Pulley.

However, Brennan rejects that notion that Orange is trying to sideline the handset manufacturers by having its Orange SPV phone made by white-label manufacturer, HTC. “Definitely, having the manufacturer-branded phone is an important thing,” he says. “One of our big coups was having Motorola do the Microsoft phone,” adds Brennan.

However, it is clear that operators will use their clout. Brennan said that six different vendors are working on 3G phones for Orange and that no shortlist has been made yet. Equally, the vendors won’t stand idly by. Samsung, for example, understands that selling a device as personal as a handset can sell other products, too.

Finally, the handset vendors are not the only threat to mobile brands. “We started with Microsoft because they were very flexible about letting operators put their own experience on the operating system,” says Brennan. “Eighteen months ago, Nokia was not very flexible, but they are now doing a signature device,” he adds.

Ouida Taaffe is an ITU Telecom World 2003 On-Line News Service editor.

The comments and views expressed in the Online News Service and Show Daily are those of Horizon House Publications and do not necessarily reflect those of the International Telecommunication Union (ITU), organizer of ITU TELECOM WORLD 2009.