ANALYSIS: Mobile giants shape up for change - Following a year that has seen falling handset sales and wavering investor confidence, 2002 represents a major communications challenge for mobile phone companies, reports Chris Scott

If 2001 was the year the mobile phone boom ended, 2002 looks set to

be the year the industry grows up. The patchwork organisations of global

operators are to rebrand into recognisable international brands, while

the industry acts to get its house in order in advance of the arrival of

new technology - all of which will require a great deal of work to keep

customers and pundits informed.



WestLB Panmure telecoms analyst Benedict Evans says the decline in sales

is indicative of market change. 'Everyone worth having as a customer has

a mobile now. Rather than subsidising handsets and acquiring customers

the issue now is retaining them. This year is going to be seen as

breathing space before 3G launches and the upgrade process starts all

over again.



'The operators' PR task is to get customers to identify with their

brands rather than their rivals. In the next couple of years, price will

essentially become subordinate to brand both through emotive links and

the services firms offer,' he adds.



Last month, the freshly demerged mmO2 captured the prevailing mood of

the industry when it announced it was delaying the launch of 3G services

until 2003. But while companies' launch dates for the service vary, the

strategy of educating the public about it is a common challenge.



Vodafone is pressing ahead with plans to introduce the service by year

end. But head of corporate communications Anna Cloke says operators must

exercise caution in its promotion.



'When WAP was introduced, we saw a huge amount of hype from some parts

of the industry, claiming it would be an amazing service. It was a huge

leap forward, but the hype created false expectations and some

commentators were disappointed with what was delivered.'



Cloke says the introduction of the 'next generation' mobile service -

'we don't call it "3G" as it doesn't mean anything to people' - should

be seen as evolution, rather than revolution.



One2One director of comms Neil Lovell, who is reviewing all his firm's

PR needs, agrees: 'We want the technology to be invisible and for people

to buy based on the services they will get.'



Evans says PR surrounding existing offers will not be hampered by the

impending arrival of 3G. 'The bulk of pre-pay customers now have an

18-month-old handset. When they see one on sale with a colour handset

and GPRS (new mobile technology similar to broadband in its expected

impact), they'll buy it.'



Even without 3G, change is afoot in 2002. Names such as BTCellnet and

Genie will be replaced with the pan-European O2 brand, while One2One is

to assume the brand of parent Deutsche Telekom, T-Mobile. UK market

leader Orange is extending its brand to subsidiaries in countries from

Poland to Cameroon, as Vodafone looks to extend its name across other

European markets. All of this as the combatants prepare to do battle

with yet another rival - the licence-winning 3G operator backed by Asian

conglomerate Hutchison Whampoa.



David Nicholas, mm02 media relations head, acknowledges that his firm

faces a major PR challenge. 'It's not just about communicating the brand

externally but communicating our culture internally. We have developed a

strategy to instil a new culture within our 15,000 staff around

Europe.'



At One2One, Lovell believes his company's new branding will enable

T-Mobile to continue acquiring customers, particularly among the

business community. 'T-Mobile is not exclusively a business brand, but

it makes sense that if people are using their phone in the UK they can

use the same brand when they travel abroad - that particularly applies

to business users.'



Operators are now taking strides to convince investors and

opinion-formers of their business models following a hugely difficult

2001.



Vodafone, perceived as the best-managed of the main operators, is,

according to Cloke, trying to keep people informed through transparency.

'We want to ensure people have access to the right individuals here so

they can be confident of our strategy,' he says.



Orange has similar plans. 'A big priority is to educate the markets that

we're a serious business,' says Denise Lewis, group director of

comms.



One2One, meanwhile, is preparing for a potential IPO this year, meaning

it too will need strong market links.



With the mobile telecoms sector maturing to match its market, one area

of certainty at least is that their comms teams will be busy.



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