How to capitalise on the sub-brand opportunity

MNOs are facing tough competition from agile new entrants to the market. How can MNOs build new propositions in a fragmented mobile market that help them become more relevant to subscribers?

Mobile markets are fragmenting in many regions and competition has intensified. New market entrants, whether MVNOs, OTT players or other Digital Service Providers, have been able to create differentiated or low-cost propositions that have attracted customers away from established services.

As a result, MNO brands have become less relevant to an increasing number of customers. With more providers to choose from, customers have become more discriminating, searching for offers that match their specific needs.

Many of the newer entrants are also more agile, with the ability to introduce new propositions faster than traditional players. As such, MNOs have sought new tactics to recruit and retain customers.

Re-establishing relevance to the customer using sub-brands

One approach that has achieved success is the launch of sub-brands, sometimes known as second, or B brands. Sub-brands are vehicles, often acting autonomously from the master brand, that enable MNOs to address significant market segments or niche opportunities, with distinct demographic, distribution and service characteristics, without distorting the main brand.

The appeal of the broad-based MNO brand has decreased as it becomes harder to differentiate from the competition. This is confirmed by data from research company, YouGov, which reveals that MNOs are losing more customers than they are gaining^[1]. This compares to MVNOs – which are gaining more customers than they are losing.

As a result, the value of a sub-brand has been recognised by many MNOs. The concept is not new but there is a new urgency forming, as MNOs confront the challenges of optimising and transforming their operations and networks. There are many different approaches to sub-brands – some are positioned entirely separately from the main brand, while others are held a little closer to the parent entity. Others have been acquired.

How can Digitalk help you to successfully launch a sub-brand?

As more enter the market, sub-brands provide an effective means of defending an established position but in a subtle way. A further approach is to avoid the issue altogether and to focus on enabling MVNO partners to access market segments via the host MNO’s network assets. This is perfectly viable and has been a strategy for several successful players. However, there are pitfalls that need careful consideration.

MNOs need the ability to launch new brands, rapidly, either as standalone entities or in close proximity to the parent. But they must be able to do so quickly, in a lean and agile manner, and in a way that enables the sub-brand to be creative and flexible. They need to be able to identify new opportunities and exploit them, without impediment. This demands a coordinated approach across teams, processes and technology.

Digitalk Mobile Cloud gives MNOs the agility they need to enable full digital service operations, for multiple sub-brands, allowing them to compete with agility and address new niches and segments, while securing the benefits of adopting processes to support digital sales and marketing.

To find out more about how Digitalk can help you to successfully create and launch a second brand, regardless of deployment model, download our white paper here.

^[1] https://yougov.co.uk/topics/politics/articles-reports/2018/02/27/mnos-are-losing-more-switchers-theyre-gaining