4/9/2008 12:55:00 PM
Making complexity attractive
Not quite breaking news: but expect a further delay on Orange TV. Orange told us this week that ‘convergence’ was well and truly on its way. TV over broadband in the home is still being trialled in Leeds, but new CEO Tom Alexander wants to make sure it gets the execution absolutely right. We’re still not completely clear how it relates to a mobile phone service – other than giving one away for free to stop a customer from churning.
If you’ve ever bored family and friends with industry talk about broadband, mobile and TV converging, you’ll be familiar with the sight of faces being scrunched, eyebrows raised and yawns. But when you introduce the word ‘free’, people start taking notice. There are some fabulous services being offered now and on the horizon in our industry, but there are the familiar obstacles of complexity, service and price. Phones 4u is looking to target those areas with its deal with Sky and Virgin. It is making big strides to move away from its streetfighting reputation and into an area about service and product knowledge.
The company believes it is ideally placed to make the most of the complexity of products and tariffs from the convergence of different services because of its high street salesforce. Arming that salesforce with knowledge is intended to help guide customers and change the Phones 4u stereotype. There is a lesson for other independents. The ability to strip away complexity will be valued at a premium for customers faced with a multitude of choice and permutations. Finally, Phones 4u is taking on that trusty retail weapon: subsidy. The same model of taking commissions to slice off the cost of hardware has proved so successful for mobile phones, there is no reason why it shouldn’t work for laptops and plasma TVs.