Big Question#1: Encouraging 4G/LTE uptake while maintain 3G?
Over the past couple of weeks we have been treated to the usual slew of top XX analyst predictions for 2015, so far nothing has been too far out of the box. For my part, I think prediction are overrated and I have started compiling a list of my 10 Big Questions for Telecoms in 2015. Admittedly, so far, I have only 3 Big Questions written down in my notebook. I must confess I have given myself rather stringent criteria to what can be added to the list. The reason why I am prematurely sharing this with you all has to do with something I read earlier this week, namely this headline:
Airtel offers 4G services below 3G rates to counter Reliance Jio
The backdrop story (here – telecomlead) is the data price war that has broken out between operators in India. The reason that it caught my attention (apart from my obvious interest in data pricing, was that it pretty much mirrored one of my Big Questions for 2015. This one..
How will mobile operators market 4G/LTE without denigrating the value of their 3G networks?
The way I see it this will be a challenge for mobile operators. Intense competition in many markets, such as the above example in India, will see operators try to lure subscribers to 4G/LTE with the promise of higher speeds at the same price or even cheaper rates than current 3G data services. If operators continue to fall into the trap of systematically reducing the cost and increasing the bandwidth, they should not be allowed to stand up at conferences and lament about falling ARPU and the good old days.
This should be where marketing steps in, this is after all a branding issue. The operators must find a way to successfully position their 4G/LTE offerings as premium product/service when compared to 3G. Let’s face it, 3G networks will be with us a good while yet and there are plenty of subscribers who will do just fine there.
Marketing’s time to lead?
Operators need to position their offerings in terms of a subscriber’s digital lifestyle. Some operators have successfully started down this road by offering premium content and services bundled in with the top 4G/LTE plans. Subscribers need to see the value of the 4G/LTE network in terms of how they can benefit from it. Operators need to speak to customers in terms of how the 4G/LTE network is the network of choice for people that enjoy their sports, movie buffs, video conferencing, enterprise cloud users, etc and not in terms of simply more speed. 3G network should be clearly positioned for digital lifestyle that like to stay in touch and up-to-date, but are not the power users of 4G/LTE. A clear positioning distinction will enable customers to identify will offerings and select the network that matches their digital lifestyle.
The easiest things for operators to do is succumb to price differentiation. That road will lead inevitably lead to a price war and perpetual price erosion. Operators need to set up and put on their thinking caps and let the marketing people take the floor. I didn’t say this would be easy. It wouldn’t have made my top 10 telecom questions for 2015 if it was easy. And, yes I know I only have three big questions so far but 2014 ain’t over yet, so I still have some time.