You are now leaving this site and you'll be redirected to the Interbrand Global website.
When people hear about “emerging” economies, they usually think of growing countries that, presumably, have yet to catch up with the technology and living standards of more developed nations. But, in reality, this couldn’t be further from the truth, especially when it comes to telecommunications.
Connectivity, spectrum, fibre, 4G, OTN and other modern themes are just as integral to telecom brands operating in developing markets as they are to ones in developed markets. From a brand management perspective, the convergence of technologies is leading to consolidation of products and services into single brands. Oi in Brazil, for example, has unified all its companies and services, including subsidiaries like Telemar, Velox, and Brasil Telecom, under the Oi umbrella years ago. More recently, in February 2015, Telecom Italia, announced it is uniting its fixed, mobile, and broadband business under the TIM brand. In the U.K., competitors Orange and T-mobile went even further, merging their businesses under the EE brand, recently bought by BT. “It is a single brand game”, says a senior executive who works in the telecom industry in Turkey. In both emerging and developed economies, simplicity and efficiency are key words in the sector.
Building long-term loyalty—it takes more than rewards
As these examples illustrate, global telecom players share common goals—but they also face common challenges. Telecom is still a low involvement category, meaning that customers’ inertia plays a big role in helping providers’ maintain their customer base. Customers, by default, remain loyal as long as service is quick and relatively hassle free—or until another provider offers a better deal.
With loyalty being so critical, operators from all over the world have begun to reward it with sports or cinema tickets, opportunities to attend events, or by offering entertainment services such as music stream.
But in a complex ecosystem where formidable global brands like Apple, Google, Facebook, and Samsung co-exist with local broadcasters, internet sites, social media and countless apps, customers naturally gravitate toward brands that are not only engaging and attractive, but also simplify daily life—especially those that are increasingly becoming a bigger, more visible part of daily life. Unlike brands such as Apple, telecom providers are often relegated to a commodity-utility status. Rather than considering how a telecom brand might fit their lifestyle or values, consumers simply want to pay the lowest possible price for having a line or internet connection—and they don’t want to be inconvenienced by lagging service. Obviously, price and reliable service are huge considerations for most consumers, and rewards are often appreciated, but what will it really take to drive preference and lasting loyalty? To transcend utility status, telecom brands need to do more to create real emotional connections with customers.
Confronting hurdles to growth, region by region
While technological advancements and challenges for brands are similar in many markets around the world, people’s fundamental needs can be very different. On the one hand, Nigeria, for example, is pioneering a national identity smart card with biometrics and payment application to facilitate financial inclusion, but, on the other hand, attacks from Boko Haram fighters continue to beleaguer the nation. In another example, the Mexican brand, America Movil, is among the top 10 telecom providers in the world in terms of size and market value, yet serious crime, drug dealing and corruption issues continue to plague Mexico. In Turkey, providers invest heavily in speed, and the penetration of social media is one of the highest in Europe, but unemployment rates among younger segments of the population remains as high as 20 percent in this second youngest country in the world. In the race to advance technologically, how can these countries overcome such hurdles to growth?
The answer: create shared value
Innovative brands operating in these countries are working toward solutions, in many cases supported by industry bodies such as GSMA and its Mobile for Development Foundation. In Africa, Econet in Zimbabwe, MTN in South Africa, and Safaricom in Kenya have all bet on Mobile Money to improve financial inclusion and drive relevance for their brands, while Tigo in Tanzania promotes entrepreneurship to improve economic development. In Latin America, mobile operators are playing a critical role in reducing e-waste. Leading operators in Turkey, such as Türk Telekom, invest heavily in educational projects to support the country’s growing young population.
Of course, it is paramount for telecom operators in developing countries to invest in new technologies, better and more transparent customer service, and to create more engaging ways to attract customers and make sure they feel valued. But telecom operators in emerging markets also need to play a more active role in improving the social standards of the communities they serve. Granted, this is difficult in an industry with decreasing revenues due to less voice and text usage, and higher demand for investments in infrastructure and speed. However, to sustain—and ultimately grow—their businesses, providers in these markets also need to foster the development of the society in which they operate. The payoff? Creating the very conditions that will allow their businesses to prosper.
If you would like to discuss this article with Paula Oliveira, please send an email to firstname.lastname@example.org.