T-Mobile: The future's bright

T-Mobile: The future's bright

Just two years ago, T-Mobile was in real trouble. Its marketing was inconsistent, profit was waning and it was losing customers to more aggressive rivals such as O2.

The operator has scored a huge coup following its merger with Orange to form Everything Everywhere on 1 July, but after a turnaround in both its marketing and its finances – under MD Richard Moat – it was already in good shape. And the brands will remain separate after the merger – a clear signal that the T-Mobile brand is now firmly established.

In recent times, T-Mobile has come to represent a ‘cheeky’ brand, following viral campaigns such as its famed sing-along YouTube videos and the latest ‘Night In’ with Blockbuster ads.

‘T-Mobile has come a long way in 12 months,’ says CCS Insight analyst Shaun Collins. ‘Moat was brought in to financially restructure and unfortunately jobs were lost.’

But the operator has moved on with propositions, such as its £10 offer and the ‘Texts For Life’ proposition, he adds.

T-Mobile’s head of brand and soon to be Everything Everywhere VP of T-Mobile propositions, Lysa Hardy, is the first to acknowledge the operator’s previous inadequacies. She says: ‘When I started the role in October 2008, I was conscious that the brand wasn’t cutting through in the way we wanted it to.

We developed the Life’s for Sharing as we didn’t have much money to spend. ‘We weren’t getting any emotional engagement from customers,’ she adds.

‘What we uncovered, for our core customer group, was about keeping in touch with those closest to them. This was about something bigger than a mobile phone. All the advertising we do now comes down to sharing moments.’

Hardy also admits that T-Mobile’s advertising had been inconsistent. She says: ‘We had approached every campaign as a new campaign. We wanted to build consistency and build that awareness.’

And now the operator uses its customers for campaigns. ‘The customer piece has been very consistent,’ Hardy says, pointing to campaigns such as the YouTube videos and the latest ‘Night In’ campaign, where customers film a clip of their favourite ‘night in’ to be included in the adverts.

She adds: ‘Now we see fun a lot more – a more playful position as well as sociable and popular. We haven’t grown our customer base significantly, but we are more popular.’

‘Value’ brand

However, it is still difficult to define T-Mobile. The industry is saying that T-Mobile will be positioned as the ‘value’ brand after the merger. Yet, T-Mobile has the highest contract ARPU of any network. Most point to 3 as the ‘value’ proposition of the industry, but it can’t be denied that T-Mobile is widely seen as cheap and cheerful.

‘T-Mobile currently appeals to a younger prepay audience and, although innovative in contract and mobile broadband, is best positioned in this value for money segment,’ says Collins.

Hardy disagrees: ‘Value is interesting, as people think of Tesco Value’ – although she acknowledges that T-Mobile’s customers ‘want the best
value for money’.

Hardy cities John Lewis as a brand with a similar value strategy to T-Mobile’s. She says: ‘We have a value strategy – we talk about value for money but it doesn’t mean the cheapest. But we need to make sure there will be differentiation between us and Orange. John Lewis is a good example – we want to remain playful and successful and great value for money – but we don’t want to overlap.

‘We are both [Orange and T-Mobile] great value for money but Orange has the pioneering, innovative edge that our customers don’t necessarily want.’

Collins responds: ‘It’s all very well saying they are not a low value brand but the channels and distribution have to buy into that.’

When T-Mobile launched in the Nineties it had a ‘metro’ strategy to be aggressive in the South East, and this strategy has followed it.
Collins says that T-Mobile is a fierce competitor in the South East, but ‘has a perception of an underperforming network elsewhere in the UK’.

The operator needs to expand beyond the South East, says Collins. Although T-Mobile has rolled out additional network infrastructure and also boosted its marketing, it was ‘very burdened with its coverage’, he adds.

There is no question that combining the two networks following the merger will help it, says Collins, but T-Mobile still suffers from the perception that it has coverage problems. He adds: ‘They can be competitive in London but outside they have lower coverage. The merger allows them to get the coverage monkey off their backs.’

But things are looking up. Another big win for T-Mobile was the announcement that it would distribute the iPhone this month. Hardy says: ‘Now we are in a non-exclusive position, there is so much call for these devices,’ adding that the network is ‘thinking through how to market it at the moment’.

With customers choosing the network rather than the handset more than ever before, it won’t be an easy task. Hardy agrees: ‘I’ve been in the industry 10 years. People used to want a Nokia and that has changed. I think we are in great shape.’

But what will the T-Mobile brand look like after the merger? Hardy says T-Mobile will undergo ‘no radical change’ as a brand. She says in retail, the operator will continue to have own brand stores. However, it is likely that joint branding will soon be trialled in some locations where ‘it doesn’t make sense to have two shops’.

Dual brand strategy

But Collins is doubtful that a dual brand strategy will last. He says: ‘A dual brand strategy is going to be hard to do – Carphone, Phones 4u, Tesco and the others will want both brands.’

Most people on the street won’t know they are coming together, he adds. ‘Making people aware that they are the same company will be difficult. We expect them to adopt a new brand of some sort – it would be a statement of independence from their parent groups.

‘They are in a surreal position at the moment. In terms of timescale, it wouldn’t surprise me if it [a joint brand] happened by the end of 2011.’

However, broadly ‘we see T-Mobile as a business that was in the process of reinventing itself to appeal to more than its core prepay base (it was about 60% prepay)’, says Collins.

The T-Mobile brand has survived, prospered and it is here to stay – for now.

Some are more certain. Hardy says: ‘We are in such great shape. We have become focused on where we are going.’

Everything Everywhere’s marketing structure

Everything Everywhere marketing will be overseen by chief commercial officer Andrew Ralston, whose division’s remit is to drive core commercial growth.  

VP of marketing Guillaume van Gaver, who will report to Ralston, will sit alongside VP of T-Mobile propositions Lysa Hardy and VP of Orange propositions Pippa Dunn.

Hardy says: ‘Guillaume [van Gaver] will handle market research and shared services. Pippa [Dunn] and I will have independent teams. Guillaume brings it back together from business investment, he makes sure it joi

Written by Mobile Today
Mobile Today


Please wait...

Please write code to prove you're human