Universal Launches MVNO But Misses the Mark
By Eric Lin, Fri Aug 27 03:45:00 GMT 2004

In a rush to jump on the MVNO bandwagon, Universal forgot that its core strength is content, not brand.

Vivendi Universal has beat Easy Group and Disney to market, launching an MVNO in France with the help of Bouygues Telecom. Both companies have invested in the new service, dubbed Universal Mobile, placing it somewhere between a pure MVNO (like Virgin Mobile) and a sub-brand posing as an MVNO (like Boost). The companies are not forthcoming with the financial details of the deal except that Bouygues Telecom claims to have invested 1 million Euros in the venture.

By launching Universal Mobile without reference to Bouygues in the name, the two companies hope to create a hip brand meant to appeal to subscribers under 25 years old. Universal's strength is its content, and it will leverage that by providing downloads of tracks and ringtones from its artists to lure the young audience. However that's where Universal's strength ends, the entertainment giant probably would have been better off continuing to make content deals with carriers rather than trying to become the carrier itself.

Consumers don't just know brands like Virgin, Easy, Disney and ESPN, they associate those brands with a specific lifestyle or product. When these brands launch MVNOs they do so to leverage what they are known for into yet another market space. Universal has strong content, but it has a poor brand. People may know that Universal makes movies and music, however it's unlikely they actually know specific movies or artists on the label. The brand Universal itself has no draw. It can't be summarized by one word like cool, cheap, sporty, cute or any other phrase one would associate with other brands breaking into the MVNO space.

The fact that Universal isn't a popular brand does not mean that Universal Mobile will fail. It means the company will have to work harder to create a name for itself. It can't rely on a cool factor, instead it will have to work to create a reputation, much like any new product. In the meantime the network will have to compete on price, content and handsets -- the factors other than brand that matter to young buyers.