Research Notes

Future successful mobile operators will have a multibrand strategy

Companies like Vodafone, T-Mobile, Orange and Telefonica that believe they can continue to use a single brand to service all their customers will need to re-evaluate their brand strategy.
In the early days all mobile operators believed that they could service all their customer segments across multiple countries using one single brand – in the same way that some religions hope that they will one day convert the whole world’s population to their belief. 

Back in the 1990s, a number of large mobile operators were created either organically or via M&A and started using one brand to service millions of customers across many different countries. The best known market players from that era are companies like Vodafone, Orange, T-Mobile and Telefonica.

You will often notice when you read about these operators in the media that they often almost magically manage to get a little bit extra media attention, simply because they have created some very large multinational brands that are known and available in many different countries.

In some ways there are similarities in the way these multinational mobile operators profile themselves to the way some large religions profile themselves. The mobile operators believe that they can use one single brand and a standardised message across many different countries and cultures to service all types of customers and companies.

But if you take a closer look, exactly how successful are these operators at the moment and can they be successful in the future by continuing their single-strand strategy? Or will they have no choice than to revise their brand strategy sometime in the future?

Strand Consult has been working with mobile operators around the world for 17 years and it became very apparent to us a long time ago, that a single brand strategy is not the way forward for becoming a successful mobile operator in the future.

Just like the religious world is very fragmented, with many religions having numerous subcultures that emphasise some parts of the religion more than others, the mobile markets are also becoming increasingly fragmented. This global fragmentation is increasing and is being driven forward by MVNOs and multibrand strategy mobile operators.

We have chosen to divide operators into two types of operator, based on their brand strategy:The Empire builders – These are operators that believe they can use one single brand to service all customers. Their primary objective is to acquire as many customers as possible using one brand across multiple countries.
The value creators – These are the operators that focus on getting traffic on their network. Some of their customers will be using their premium brand, others will be using their discount brand and they will still have even other customers using other smaller brands that they control, or users that are customers of the many MVNOs that the mobile operator also has agreements with and that are using the operator’s mobile network.During our business travels meeting and holding workshops for operators around the world, it is very noticable that most operators are battling to do business on saturated markets with high penetration, where most operators end up attracting and thereby swapping customers by lowering their prices.

We do not believe that a future mobile operator can service all customer segments with one single brand. How do you build a brand that is equally attractive to business customers, ordinary private customers and teenagers at the same time? The security and quality that the corporate customer needs is very different from the coolness and hype in demand from the youth segment.

In our opinion all mobile operators should use multibrand strategies. Some operators already have a multibrand strategy, but not all are comfortable with that strategy. On the one hand there are some operators that have embraced the multibrand strategy. Operators like KPM in Holland, Belgium and Germany and TDC in Denmark are using multiple own brands in combination with an aggressive MVNO strategy that together form a strong multibrand business strategy.

Other operators are still reluctant to focus too heavily on a multibrand strategy and are still primarily focusing on one single brand, but at the same time have felt obliged to enter the MVNO market. These operators are primarily using MVNOs to target customer segments that they have traditionally had trouble acquiring with their single brand strategy.

The primary difference between the two above “multibrand” strategies is whether the operator owns many different brands himself and is willing to sign agreements with MVNOs that actually create head-to-head competition with their own brands.

Strand Consult has no doubt that operators that are looking to be part of the volume game and that focus on a multibrand strategy, will be the most successful market players in the future. Operators that want to be part of the volume game but continue to believe that they can service all customer segments with one individual brand will face difficulty in the future.

Strand Consult has been working with multibrand strategies in the mobile world for many years. In 2001-2002 we published a number of reports about the Korean mobile market, where we described Korean mobile operator KTF’s enormous success with their multibrand strategy. Those reports played a central role when Strand Consult later held workshops for Stan Millers team at KPN. The report, together with our extensive knowledge about the MVNO markets provided KPN with a great deal of information and inspiration to create the multibrand strategy that subsequently resulted in KPN’s success on a number of markets.

If you would like to learn more about how mobile operators can achieve success by using a full multibrand strategy, Strand Consult can provide you with a number of reports that describe and analyse this business area. These reports describe the whole development from markets with single brand operators, to markets with fully operational multibrand strategies and how those strategies influenced various different mobile operators’ market position and revenue. Many of our customers have chosen to combine these reports with a customised workshop, where the content of the reports is adapted to the markets that the mobile operator is currently doing business on. 

You are also welcome to request more information about our
strategic workshops
More information: Receive more information

Contact us to get a copy of the report

Request the report