Strike a Pose
By Peggy Salz, Wed Dec 19 00:00:00 GMT 2001

Many operators are getting a makeover. While some are stealing the show, others are maybe going too far.

Like middle-aged women marching off to the beauty farm, mobile operators are hoping that a change in appearance will work miracles. To stay competitive in the market, operators have to be attractive to their customers - and so, they believe, they must undergo a complete transformation.

Beginning with the name and ending with the logo, operators are lining up for the mobile market equivalent of cosmetic surgery. But in the frenzy to be completely different from what they were before, they run the risk of emerging unrecognizable to their existing their customer base.

On one level there is a real need for operators to change their approach. The advent of mobile data and competition from a hungry bunch of virtual and green field operators, established mobile providers have to relate to customers as individuals rather than a statistic in a loosely defined customer segment such as "youth" or "business". Against this backdrop, yes, it is time for a fundamental transformation, but, in many cases, the actual changes taking place are only skin deep.

Risky business

The big push in the New Year is branding. Consumers are going to be inundated with new names and new pitches. Vodafone, for example, is undertaking the mammoth task of uniting its disparate operations scattered over 29 countries under one name by the middle of the year.

The campaign makes sense on paper, but some of its subsidiaries have a different view. Senior execs at company headquarters in Germany don't rule out that customers, who have grown accustomed to the local D2 brand, might reject Vodafone's exclusively Anglo-advertising approach ("How are you?" is the global slogan regardless of geography) and switch providers.

Considering that an estimated 18 million customers are due to renew two-year contracts next year, this is a serious matter. The country's six leading mobile operators will be dealt a new hand. There is the chance that some may win market share - and there is the danger that they may lose it as well.

Either way changing the name of a trusted brand like D2 just contributes to the confusion. But it won't be alone; Deutsche Telekom is taking a similar risk in the UK where it insists that its popular One-2-One brand be known as "T-Mobile UK." That should excite customers all right.

Superficial makeover?

In the race to rebrand mobile operators are forgetting that their brand is their single most important and permanent asset. The message to the customer has to be clear and consistent - but it should also be creative, according to Fred Wiersema, a best-selling author and branding guru based in the US.

He likens the Vodafone push for uniformity to a patriarch who insists all family members fall into line behind him. While parent company Vodafone has invested in a solid and consistent message, it's also a fairly dull one. "A brand should arouse interest and curiosity and not just enforce the family name," Wiersema says. The company has consistency, but lacks creativity.

But at least Vodafone is a no-brainer. This is not the case with Group 3G, the operator jointly owned by Telefonica and Sonera. The company, now known as Quam, has two problems. Group 3G was as lacklustre as a brand can be, but Quam is about as far-out as a name can get.

"Brands start out as words and then become brands," a senior marketing executive at a rival European mobile operator commented. But Quam, since it is a meaningless name, will have its work cut out for it. "Names like Virgin, Orange and Blackberry also had a hard time at first, but they at least started with a name that means something and put some extra meaning on top of that," the executive continued.

Indeed, companies like Quam remind Wiersema of "a bunch of adolescents trying to stand out from the crowd by painting their hair green and piercing their noses." Companies such as Quam have to ask themselves (as will all teenagers in about five years) "Do I want to go through life with dyed hair and pierced nostrils?"

"In time mobile companies with quirky names (such as Quam) will have outgrown their names and need to change them again," Wiersema concludes. But a name change breaks the second premise of branding dogma: consistency. "By changing the name you undermine the very brand you built up in the first place."

But Quam believes that its brand is so new and universal that it will never go out of style. "The next year will bring new services on a new technology (UMTS) and we wanted a completely new name that will allow us complete flexibility," says Quam spokesman Uwe Struck.

"It (the brand) carries no baggage with it and is vastly more appealing than other brands such as VIAG Interkom, E-Plus and Vodafone. Those are rational company names, we want to appeal to emotions." To this end Quam also emphasizes its new slogan, "I have a Dream," in its advertising push.

"We want to make the dream of mobile (data) come true - and we want to get close to our customers and help them understand what this dream is all about." In this respect Quam's brand choice isn't so off-the-wall as it first appears. The verdict for Quam: an "A" for effort, but let's see how open customers are to something so radically new.

Making mobile essential

And then there are companies like BT Wireless - soon to be known to its customers across four countries as O2 (mmO2 is the name of the group - mostly for purposes of the listing - and O2 is the name of the brand worldwide). It has chosen a brand new name that, although obscure, does at least stand for something.

It refers to the global chemical formula for oxygen - and reflects the company's conviction that the way to build customer loyalty is to become a life necessity. "Oxygen is everywhere. It's essential to you," notes Will Harris, O2 marketing vice president. "Mobile is the same way. If you leave the house and forget your mobile phone, you'll go back for it."

Unlike Vodafone, which has to take a name that refers to a product and give it a personal touch, O2 starts off with a clean slate. "Each company in the group has a chance to shape what O2 will mean to the customer," Harris says. The brand is also flexible enough to grow as the company makes its shift to mobile data. "What you can do with the mobile device is a million miles away from what it was a few years ago. We have a brand that is built for this new mobile data world."

Ironically, O2 may well emerge most successful on one of Europe's toughest markets: Germany. There customers are not only used to names consisting of letters and numbers - they prefer it, observes John Tysoe, head of telecoms research at WestLB Panmure in the UK. "There is something inherently Teutonic in the German acceptance of such brands that dates back to the birth of the market when Telekom and Mannesmann (now Vodafone) named their services after the licenses D1 and D2," he muses. "O2 plays well to the German ears."

Now it's up to O2 to introduce a service offering that makes its brand of mobile data a must-have for customers. The company's push, which includes a strong focus on apps, a possible cross-branding/cross-selling tie-up with a major media company and the wide-spread distribution of its a combination mobile phone/pc, is right on target. However, its tight ad budget will be a hurdle. After all, O2 has to get the message across to a lot of people who don't dig chemistry.

The global grail

Now that mobile operators finally understand they must appeal to the customer's emotions, they are finding some of the best names are taken. Orange and Virgin, for example, are pretty tough acts to follow. These companies, like no other in the mobile provider space, have understood that the brand needs to be personal and global.

"The holy grail is the global brand with local appeal," notes Michael Hodgson, a director within KPMG Consulting's global Information Communication and Entertainment practice. "It's difficult to create global synergies and fulfil local customer requirements. An operator has to stretch his name pretty far to cover both."

So what's left for mobile providers looking for a new identity? With Apple and Orange taken, does that mean the market is ready for a "Pear?" Cosmetic makeover is useless if the operator intends to merely peddle its old service offering under a new name. Branding may help attract customers, but it's quality and originality that will keep them.

Peggy Anne Salz monitors the global telecoms markets and contributes regularly to Communications Week International. Her articles have also appeared in a number of daily and weekly publications including TIME, Fortune, The Wall Street Journal Europe and The International Herald Tribune.