By Eric Lin, Fri Apr 16 21:45:00 GMT 2004
We've pointed out many times that the PC era is coming to an end for wireless manufacturers. It seems the same thing is happening to carriers as well. They will have to offer personalized service in order to survive.
We missed it last month, but in America's Network Andrew Cole applied what is happening in the greater marketing space to the successes and failures of the wireless space. Specialty brands are now putting their mark on just about everything, and loyal fans are soaking it up.
American carriers don't offer any brand affiliations or loyalty programs, and as such experience up to 30% churn per year. Each carrier has a single brand that tries to be all things to all people, with the notable exception of Nextel. Nextel advertises the same phones and services to its business customers in a very different manner than their Boost subsidiary, which targets the youth market. This might be one of the reasons many analysts consider Nextel successful and it enjoys some of the highest retention and ARPU among US carriers.
Cole also points to the rapid rise of MVNOs like Virgin Mobile. Brands like Virgin are better known and inspire more loyalty than most carriers, or even phone manufacturers. As such he expects that if a few well known media and product brands launch MVNOs, they could easily gobble up to 20% of wireless customers. Carriers either have to start focusing on markets themselves, or open up to becoming a backhaul provider for MVNOs as high end retail practices start to effect every aspect of how we spend our dollars.
I fear we would have missed this except for a piece today on Telepocalypse, comparing this cycle to the history of department stores in the US. He points out that the specialty stores that became so popular in the 90s as the department stores faded away are now being joined by new super stores like Wal-Mart and Target, offering one stop shops for money and time conscious shoppers. Following this example, after a cycle of specialty carriers, it is possible a few low price mega-carriers could take their place in the wireless ecosystem as well.