Joey Barton and his fellow sportsmen might inadvertently be pioneering the future shape of the mobile communications industry. In the past couple of weeks, the maverick Newcastle United player has gone from zero to hero, at least in the eyes of Twitter users, as he dramatically increased his followers to 330,000 and counting. In doing so, he is participating in a fast-growing trend which may impact how mobile operators brand and market their services in the future.

James Middleton

August 15, 2011

5 Min Read
Branding can make all the difference

Joey Barton and his fellow sportsmen might inadvertently be pioneering the future shape of the mobile communications industry. In the past couple of weeks, the maverick Newcastle United player has gone from zero to hero, at least in the eyes of Twitter users, as he dramatically increased his followers to 330,000 and counting. In doing so, he is participating in a fast-growing trend which may impact how mobile operators brand and market their services in the future.

It’s not so long along that Virgin Mobile became the UK’s first MVNO, partnering with T-Mobile and demonstrating how branding can make all the difference in this largely commoditized market. On many occasions, I’ve used the example of Virgin Mobile to illustrate to marketing non-believers just how much impact the way a vanilla product is priced, packaged and presented can make. It’s impressive stuff. The brand is growing well with 4.5 million plus customers in the UK and countless more in the other international markets it has subsequently entered. This telco truly is a great advert for the power of brand and a perfect illustration of how products that are largely based on logic can benefit hugely from some magic in their branding.

True to form, Virgin was at the forefront of a trend that saw brand owners recognizing that they could create and reward loyalty among their core devotees by extending their brands into mobile services. This business strategy is expected to fuel spectacular global growth in the MVNO sector with experts forecasting a total market penetration of between 150-350 million customers by 2012 with a corresponding market value of $67bn. We’ve already seen serial brand-extenders like Tesco enter the mobile category (now with a very respectable 2.5 million plus customers), alongside ethnic-focused players such as Lebara Mobile, Vectone and Lycamobile and more recently Kontakt, targeting the UK’s estimated two million Polish community. It seems that every closed user group is now fair game for a dedicated mobile offer.

Industry experts agree that more than half of this new, MVNO-enabled market will come from one of the more tribal segments of society: sports fans. It’s not surprising given the fierce passions and loyalty that sport invokes and could present huge money-making, as well as marketing opportunities. Just think about the scale and fan-bases of teams in cricket’s Indian Premier League. And football of course, where clubs such as Porto, Fenerbahce, Benfica and Ajax have already launched mobile services to their fans.

Which brings me back to Joey Barton (or @joey7barton to give him his full Twitter handle). When he’s not involved in controversy on the pitch, this self-styled footballer-cum-philosopher has demonstrated why we are truly living in the age of the individual. He already has more than ten times as many followers than Newcastle United’s official Twitter feed, so is the balance of influence shifting from the corporate to the person as they grow large following communities? Is it just a matter of time before we see Joey Barton Mobile launching to join Bieber Mobile, Beckham Mobile, Fab4mobile and Gaga2Gogo? Is fragmentation of the MVNO market inevitable and are we moving towards to the scenario of mass personalization as barriers to enter the mobile market are removed? Are we about to witness the birth of the PMVNO (for those bad at remembering acronyms: the Personal Mobile Virtual Network Operator)?

Assuming that the number of consumer-facing mobile brands continues to expand, it’s inevitable that the need for mobile content will grow accordingly as providers, whether Vodafone, FC Porto or Lady Gaga search for innovative and differentiated games, news and services to persuade subscribers that there’s enough added value to make the switch. We can expect to see more mobile content studios springing up to cater for the increased demand as well as the networks and handset manufacturers entering the fray.

Apple has already exhibited Darwin-esque tendencies in its approach to market penetration, proving that survival of the fittest can sometimes lead to natural selection. It’s definitely in the best interests of consumers to see some new contenders emerge to challenge their dominance.

My view is that now is both an exciting and terrifying time for the established players in the market.

For many years, the big mobile companies have sat atop brands with massive intangible value. The major players in Europe – Vodafone, Orange, T-Mobile and O2 – have all seen their brands valued at between $10-20bn, reflecting the large and sustained marketing investments they have made over the years.  This is encouraging news for someone like me. It highlights how much impact a well-designed brand can add to a product that is largely virtual.  But I see a crossroads ahead.

On the one hand, I see the mobile market leaders moving, like many technology brands, to a B2B2C model where they have the flexibility to have relationships both directly and indirectly with the consumer. It can only help their competitive advantage in my view and I hope that the more prescient mobile players will champion it.

On the other, I recognize that they need to preserve the huge value they have created in their own brands. In this respect, the current trend is all about customer loyalty and getting closer to the user: O2 with their focus on music and venues, Orange through community engagement projects such as Rock Corps, Vodafone with sport and fashion, T-Mobile through participative advertising campaigns.

Having a physical element to a virtual brand is a vital way of creating loyalty and increasing levels of consumer engagement. In this respect, I’d expect to see more radical representations of the mobile operators in the real world, from coffee shops and social clubs to micro-retailing, music and sporting events. Given how much the mobile phone can minimize physical interaction in society, I believe it’s the role of the operators to champion more and more reasons for us to get together to network physically and not just virtually. Now I’m sure that Joey Barton would be a big fan of that.

Richard Sunderland is Founder & CEO of branding agency, Heavenly

About the Author(s)

James Middleton

James Middleton is managing editor of telecoms.com | Follow him @telecomsjames

You May Also Like