Mobile & Telecoms

Branding: 5G and the operator game of chess

“Telecoms operators need to innovate like never before if they are to avoid becoming dumb pipes…” Stop me if you’ve heard this one…

I’ve specialised in telecoms PR for 15 years. During this time, if I had been given a pound (or dollar) for every time I have written or said the words ‘dumb’ and ‘pipe,’ I’d be living in a house made entirely of gold. If I were to supplement this with the word ‘utility,’ or the phrase ‘the operator race to the bottom,’ my personal wealth would outstrip the GDP of most nations outside the G7.

Before any of you accuse me of biting the hype-based PR narrative that ultimately feeds me, it’s all true. Operators need to constantly re-invent, they need to appeal to increasingly younger audiences and they need to do something about their ailing brand value. The reason for my frustration is that I have been reflecting on the dwindling operator brand for the last ten years. It doesn’t appear to be changing.

Operator brand invisibility – the bare truth

The 2018 list of the most valuable brands, posted by Forbes magazine, is telling. The top five comprises Apple, Google, Microsoft, Facebook and Amazon. Some could argue against the US-bias here, but you’ll get no complaints from me. Kudos to Microsoft for hanging in there when the likes of Apple, Google and Amazon continue to change the world.

The highest ranked telecoms operators are AT&T (10th) and Verizon (19th). All this despite mobility, and the leveraging of mobile network infrastructure, being such a fundamental part of the success stories for Apple, Google and Amazon. Many industry commentators will point to the need for to achieve brand parity with these technology leaders. My sense is they’ll never fully achieve it, well, not Forbes top five status. But that doesn’t mean they shouldn’t try, particularly with 5G on the near horizon (and I mean proper 5G!)

The response? Pursue deals or focus on the network?

The real question remains: which approach should operators take in building brand value? If we believe what Forbes is telling us, AT&T is the world’s most valuable operator brand. It has got to this point by betting big on content (and spending big on the likes of Time Warner). It now faces the unenviable task of integrating new content and services, on top of its basic connectivity packages, to the satisfaction of consumers. This is an area where operators have traditionally struggled (although AT&T has been better than most).

Verizon has also been acquisitive but I do wonder if the appointment of Hans Vestberg as CEO, replacing retiring Lowell McAdam, could signal a new direction for the operator? Vestberg is famously a network guy. He ran Ericsson for a good while. He was also Ericsson’s CFO prior to being its CEO. Does this mean Verizon will act more conservatively? Will they focus on delivering the best possible network first and look for partnerships as the best way to achieve differentiation and customer acquisition over and above content exclusivity? Could Verizon, dare I say, be increasingly comfortable with being a utility?

Most will favour the middle ground

Spending big on content is an expensive and risky business. Just ask BT’s Gavin Patterson. I think there is general consensus that operators will look to recoup 5G investments with exclusive partnerships with valuable brands that have content to fill pipes and control consumer eyeballs. To this end, the AT&T Time Warner deal could prove inspired. The likes of Amazon, Spotify and Netflix will continue to adorn tariff packages offered by most leading global operators.

Leopards are changing their spots

But these guys will be attracted by scale. Those with the biggest customer bases will attract the most attractive partnerships with the most sought-after brands. But are operator brands currently relevant enough to tempt consumers into action? Particularly younger consumers? Not if you consider how many operators are launching their own MVNO sub-brands as a means of reinventing themselves in front of new, younger audiences. Nothing underlines operator brand failure like launching a new brand to compete with itself. But desperate times and all that…

5G does offer a window of opportunity in terms of operator brand reinvention. The hard fact remains all brands need to leverage mobility to stay strong and stay relevant. Unless the laws of physics change, licensed spectrum will remain the only means to deliver this true mobility, beyond the reaches of Wi-Fi, and operators will, therefore, always have a massive role to play.

The additional speeds and throughput 5G bring should see an impact on the types of services offered. To fully capitalise, operators must appear relevant to the lives of their customers and be prepared to engage with them in a manner of their choosing. Operators must absolutely decide who they want to be when they grow up. The branding 5G game of chess is underway.

Written by Paul Nolan


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