To brand or not to brand?

SIMON SMITH – 8 MAY 2014

Challenges being faced by telecom brands in Saudi Arabia today. Guest post by Syed Abdul Karim, brand experience director, Mobily.

Saudi telecoms are going to see some tough times ahead. The market has matured. In fact it has already become over-saturated. With penetration levels at nearly 200% and with three other players (MVNO’s) about to enter the market, the role of brand building has never been more crucial. Even with the three existing MNO’s we have seen many a price war with a continuous drive to compete on value offers.

Of course the end consumer is the one who will gain the most as telecom prices hit rock bottom. The question is where do telecoms operators go from here? For how long can each player continue to compromise on margins for the sake of retaining customers? Can Saudi telecom operators do what brands like Coca-Cola have done – literally taking something as basic as sugar, flavour and water to create global brand value? The answer in my opinion is a conditional yes! Why conditional?

Service Challenge

For one, the elements that make or break the telecom brand experience are far too many. For example, data services can be overwhelmed in certain high traffic areas of a city where many may congregate over a weekend. A drive down to certain suburban locations may reduce the usual 4G (LTE) signal to mere 2G (EDGE) connectivity. Or a basement in some parts of a city may lose connectivity altogether.

It can get far worse. A customer’s forgetfulness to activate a roaming bundle may lead to a bill worth thousands of riyals, causing anger and frustration. To make matters even worse, the lack of empowerment among customer service staff leaves them incapable of resolving a customer complaints. However, in such a market environment any “open happiness” kind of communication could lead to resentment, as such efforts would feel hollow and meaningless.

Commodity Challenge

Add to this, the challenge of dealing with fierce competition especially when there are no non-users left in the market. The battle is no longer about who gets to a customer first but who can offer them a compelling reason to switch, if at all. With the sector being seen increasingly as a commodity, the mindset is to get a “dumb pipe” that works. Period. People no longer think about electricity; it is something that is taken for granted. It is only when you lose power, do you realise its importance and how its absence can paralyse life as we know. The same thing is becoming a reality for telecoms. People only think about a telecom brand when things go wrong. Brand building in such a context not only becomes important, but also becomes very challenging.

Segmentation Challenge

The other brand challenge is the “one size doesn’t fit all” dilemma that telecom brands face. Powerful brands stand for a few things, not just one. More importantly they don’t try to be everything to everyone. The nature of the telecom business is such that everyone uses the service. From a young student to an ageing entrepreneur, from an Asian labourer to a multinational executive working at a private corporation, they all use telecom services from a single company. Add to that the business sector whose telecom needs are far more complex and diverse but again served by the same telecom operator.

How does a telecom brand meaningfully connect to each segment as a single brand in such an environment? This is even more difficult in a market like Saudi Arabia which has a large expat population speaking different dialects and languages, aside from the obvious cultural differences between each segment of the population. How can telecom operators resolve this? Should they simply start to create sub-brands for eachsegment? With market prices being challenged everyday how can operators support so many brands in a way that positively grows their business?

These are some of the challenges facing telecom brands in Saudi Arabia. It would be interesting to see who is able to overcome these challenges first and how. A great market to see the evolution and rise of brands in the telecom sector.