Telecom industry now lies in a red ocean as mobile service revenues in the telecom sector become saturated, meaning most people who want telecom services already have them. This limits the growth potential from new subscribers, pushing companies to focus on retaining existing customers and upselling with add-ons.
In this article, We are trying to explore how sub-brands serve as vessels, navigating through the red ocean by addressing underserved or completely new segments.
Sub-branding and MVNOs have emerged as a strategic approach to cater to diverse consumer segments. Each segment has unique needs and preferences, which are addressed through tailored sub-brands.
1. Digital-only, No Frills :
This segment focuses on customers who prioritize basic, uncomplicated services without any additional features. ‘No frills’ offers straightforward, reliable telecom services, often with simplified billing and customer service. In that sense, Singapore Circles.Life, which has been leasing its network from M1 since 2016, can be a good benchmark to approach the ‘no frills’ sub brand.
Distancing itself from the complexities and often overwhelming array of features in traditional telecom services, Circles.Life offers a straightforward, user-centric 5G plan with only 3 tiers 100, 200 and 300GB as of Jan/2024. As it approaches the digital-only segment, it embraces multi-country connectivity needs by offering 100GB data across 8 Asian countries. and for locals, it offers a 1TB roll-over plan.
2. Low Cost: Aimed at budget-conscious consumers, these sub-brands compete primarily on price. They provide essential telecom services at lower rates, appealing to those who seek value for money without a need for high-end features.
GoMo represents a strategic move by Eir to capture the growing segment of cost-conscious consumers who crave straightforward, no-nonsense mobile services. Interestingly, Gomo has only one price tier by offering “price for life” of €9.99 in Oct 2019 (now has been raised to €14.99 for 5G plan since) Gomo is very focused on not just the acquisition and growth of customers, but also keeping the customers. With GoMo customers, the churn of that customer base is super low compared to any other part of the business, particularly the €9.99 base,” Jo O’Donovan, director of GoMo mobile department, says
Marking a remarkable 12% year-over-year growth in its postpaid segment, much of this success can be attributed to GoMo’s robust user acquisition strategy.
3. Youth: Youth-oriented sub-brands are designed to resonate with younger demographics. They often include trendy marketing, youth-centric plans with high data allowances, social media bundles, and flexible payment options.
LG Uplus’s targeted strategy for the youth, focusing on fun and the student lifestyle, highlights the importance of niche marketing in the telecom sector, especially in engaging with younger demographics effectively. In a strategic move to appeal to the youth and student market, LG Uplus has introduced youth-dedicated plans in 2023 that distinctively offer more GB and tethering data, enhanced fair usage policy speeds catering to the high data usage characteristic of younger users.
Above 3 segmentation research is just the tip of the iceberg in understanding the multifaceted nature of telecom segmentation. In our upcoming posts, we will delve deeper into the diverse spectrum of telecom sub-branding strategies. Stay tuned as we explore the intricacies of premium brands – those that cater to high-value customers, geographical brands that address the localized needs of specific regions, and brands designed for migrants, offering connectivity solutions that bridge distances with their home countries. Each of these segments presents unique challenges and opportunities, and we’re excited to uncover how telecom companies creatively and effectively respond to these varied market demands.