There’s little difference, in most cases, between the services carriers offer. Innovations don’t remain so for long, as operators constantly scramble to make sure their offerings equal those of their competitors. Even in countries with multiple wireless standards, carriers all offer essentially the same services.

But new challenges are emerging as markets – and mobile data services - evolve. The advent of 3G will bring a number of new carriers to market, and these companies must quickly establish a presence to hope to compete with incumbent competitors. As other operators are spun off or sold, they (and their buyers) must often build awareness of a new brand. And as these companies fight for customers, selling users on mobile data services will also be key to revenue growth.

This scenario offers up quite a marketing challenge. When there’s parity among the other elements of the equation, marketing becomes the key for growth – and in some cases, survival.

Divide – and conquer

Although i-mode is built on a sound technological foundation, marketing has proven an essential element of the service’s success – both in how NTT DoCoMo sells it to consumers, in its pricing strategy, and in luring content providers and the customers to top-notch content.

i-mode came about when DoCoMo re-engineered its mobile network to use packet switching in an effort to increase its capacity. This created a challenge for the company to capitalize on the new networks’ data capabilities and convince customers to use data services, whereby DoCoMo could charge per-packet for the information delivered. Ever-mindful of usability, DoCoMo marketed i-mode as something unrelated to – and easier to use – than the Web.

While European carriers were busy trying to educate users on just what exactly WAP was (and completely failing by describing it as “the Internet in your pocket”), i-mode was selling itself on the services it offered rather than its techy features. “Many people don't realize how effective NTT DoCoMo has been at educating consumers about the benefits of i-mode,” says Tim Clark, the senior strategy manager for business integrator Ion Global’s Japan practice, and the editor-in-chief of the Japan Internet Report.

“I’m sure you have heard that DoCoMo was very careful never to mention words such as ‘Internet’ or ‘online’ in association with the i-mode service,” Clark adds. “For most people, the key driver for purchasing the i-mode service, even today, is the opportunity to obtain and enjoy an e-mail address without the hassles and higher expense of buying and setting up a computer. Japanese companies in the consumer electronics arena lead the world in understanding usability issues for electronic personal convenience applications.”

	i-mode's marketing success factor: avoid tech features, focus on services.

But Clark also mentions that key to DoCoMo’ success was marketing i-mode to potential content providers. “Equally important, the company was brilliant in the way it systematically identified and approached service ‘champions’ in each industry, he says. DoCoMo wasn’t interested in becoming a media company and providing its own content. It realized its expertise was in simply building a better pipe for the experts – existing media companies and application developers – to deliver their data.

For instance, DoCoMo correctly realized that lining up banks to offer online services would be a key driver in getting other industries to follow. They guessed that by getting this most conservative of Japanese industries online, others would follow. Clark maintains that by attracting companies to deliver compelling and in-demand content and services, DoCoMo can shift much of their marketing burden, allowing other companies’ services to sell consumers on the value of i-mode.

This plays out in DoCoMo’s pricing strategy as well. It charges users 0.3 yen (about a quarter of one US cent) per packet, so it benefits from any traffic on the network, while keeping the price low enough to encourage constant use. It keeps its network open, so users are free to surf any of the 50,000 or so i-mode sites. This, and the simplicity of the compact HTML language used to build pages, keeps the barriers to entry low and allows anyone to set up shop on i-mode.

But DoCoMo also sanctions about 2,000 “official” sites. These are allowed to charge from 100 to 300 yen (about USD 0.75 to 2.25) per month for their content, from which DoCoMo keeps 9 percent – the same percentage NTT keeps from premium-rate (ie phone-sex) lines. DoCoMo’s real interest lies in generating traffic on its network, and it can best accomplish by offering users services they want. And that’s best accomplished by creating an environment where both parties – DoCoMo and the content providers – can flourish. It’s this fine-line paradigm that makes i-mode’s success into a circular marketing wonder: content providers want access to the millions of users; users want access to great content, and so on.

Perception is as important as reality

Increasingly mobile operators are reaching out to their customers via emotional adverts.

Carriers have lately had many reasons to need new branding – spin-offs, acquisitions, partnerships. BT Cellnet was spun out of its parent company and christened mm02, while Vodafone and Orange’s global ambitions resulted in global networks with disparate names and brands.

These companies were faced with the challenge of promoting a new brand – be it globally or in local markets – and quickly re-establishing awareness and credibility. Marketers have to work to create a positive perception of these new brands, even if they were old companies.

US carrier Cingular Wireless was formed in early 2001 when SBC Communications and BellSouth combined their wireless assets, and instantly became America’s second-biggest operator. But the company had a unique problem – although it had plenty of customers (about 20 million), it was taking them from 11 brands and uniting them under one new one.

The company offered the exact same services, at roughly the same prices, as their competitors, so they took a different tack in an attempt to appeal to consumers’ emotions, trying to persuade them that Cingular’s service was somehow different from others. “Wireless is evolving into a more emotional category, says Virginia Vann, Cingular’s chief marketing officer.

“As the newest brand in the field, we see an opportunity to separate ourselves from the pack by being the first company to emotionally bond with our consumers and present Cingular as a more aspirational [sic] choice for their communication needs.”

Cingular leapt into the fray with several TV ads during the 2001 Super Bowl, the most expensive and widely-seen ad space in America. The ads all featured the tagline “What do you want to say?” and featured somewhat bizarre images like a fat guy ballet dancing, and a disabled artist painting with a brush attached to his head. But the most conspicuous element of the ads was their complete lack of mobile phones.

Cingular was toeing a very fine line – they wanted to distance themselves from technology as much as possible, but had to make customers aware of what they were selling – and found themselves on the wrong side of it for many people.

Seven months after launching the somewhat cryptic campaign, the company began running more straightforward ads that featured people using phones, albeit sometimes in offbeat ways, but still sticking to their self-expression kick.

The switch revealed that while the initial campaign may have made consumers curious about the company, the ads asked more questions than they answered.

A real difference

	Customer segmentation and service differentiation will be essential to carriers survival.

Carriers entering the market for the first time face different struggles. With the advent of 3G, a number of new carriers and brands like Quam, Hutchison 3G and Xfera will find themselves up against long-running, well-established names, and trying to compete by being first to market or on small price differences may not cut it. Customer segmentation and service differentiation will be essential to their survival.

Leap Wireless came into a fairly mature US market and realized that it would take a major effort to compete with the huge incumbent carriers. But whereas its competitors focused on the higher end of the market – requiring customers to sign long-term contracts and pass credit checks, sometimes a struggle for lower-income and young consumers – Leap differentiated its service to appeal to this untapped market.

"Leap's approach to offering wireless services has redefined the industry, attracting a whole new group of consumers to the benefit of wireless communications," said wireless expert Andrew Seybold whose analysis and consulting firm Outlook 4Mobility called Cricket the US’ "Most Innovative Wireless Service."

Their service still costs more than basic local phone service. However, this difference is easily overcome in consumers’ minds by the benefits inherent in mobile service. Leap has proven that customers are willing to overlook price – at least to a certain extent – when offered a significant value proposition. An important understanding that will help Leap Wireless take a brave leap forward with mobile data services – and to all the operators out there.

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