The Evolution of Digital Sub-Brands

When service providers initially launched digital-first sub-brands the proposition was fairly simple: lots of data at a low price. A digital-first approach provided a low-cost operating model which meant that the sub-brands could afford to pass savings onto their customers and offer low-cost deals.

As they were digital-first, their target market was under 25s who had grown up with the internet. They didn’t have shops or call centres. All functions from billing and marketing to customer care were delivered using an app or a website. Marketing offers and bills came via email and in some cases IM platforms.

However, the digital literacy rates of all consumers has increased dramatically since March 2020 and now digital-first sub-brands are applicable to everyone. The operating models and the offers that digital-first sub-brands provide are also getting more sophisticated as operators look to increase customer numbers and revenues and deliver a higher net promotor score.

This article looks at 10use cases from sub-brands in different stages of evolution.

One Plan Fits All- GoMo, Ireland

Irish sub-brand GoMo offers unlimited data for life for €14.99. At the time of writing (July 2021) the company offers no other plans. GoMo is the sub-brand of eir, offers a SIM only plan and is bill-pay with a 30-day rolling contract. There is no pre-pay option. Customers need to add a credit or debit card during sign-up process and payment is automatically taken one-month in advance. Any additional charges, such as international calls or premium rate calls are charged for separately. GoMo does have a fair-usage limit of 120 GB / month and apply speed throttling for users going above this limit.

This is a very simple, but effective operating model. Customers can have up to four SIMs on one account which is proving popular with families. Launched in October 2019, GoMo had attracted over 200,000 customers by June 2020. The parent company, eir, reported that it had 1,156,000 mobile customers in June 2020. In just eight months GoMo was able to account for almost 20% of eir’s mobile base.

Grow Your Customer Base and Increase Net Promotor Score – Quickly and Cost-Effectively – Very Mobile, Italy

One way companies can increase loyalty is to convert customers into ’members’. Here they have a feeling of being in a club or association, which goes deeper than the traditional supplier / customer relationship. Rewarding customers and turning them into members not only drives loyalty but it also drives up net promotor score.

Italian sub-brand Very Mobile uses a ‘member get member’ approach to help grow its customer base. By referring a friend to join Very Mobile, existing Very Mobile members get €5 as does the new member. Not only does this approach help increase net promotor score and drive a feeling of ‘membership’, it also significantly reduces the cost of customer acquisition.

Zero-Rating of Content and Social Media- Voxi, UK

Voxi is the sub-brand of Vodafone UK and offers a range of different tiered offers. Plans are SIM only and start at £10 for 15GB plus ‘endless’ use of social media (Facebook, WhatsApp, Twitter, Snapchat, Instagram, Pinterest and Facebook Messenger). Other plans, starting at £15/ month for 20GB up to £20/month 45GB plan also have endless (zero-rated) video for Netflix, Amazon Prime Video, TikTok and YouTube. These plans are also ‘5G Ready’, whereas the basic 15GB plan seems to be limited to 4G. Like many other sub-brands Voxi operates on a bill-pay /subscription model.

Making Services Stickier with Discounted Content – Congstar, Germany

Congstar is the sub-brand of Deutsche Telekom. Offering both mobile (pre-paid and post-post) and fixed broadband (DSL and fixed broadband over 4G), Congstar also offers content add-ons. For music streaming the company offers Tidal for €8.99 / month and for video it offers Disney+ for €8.The normal price for Tidal and Disney+ in Germany is €9.99 and €8.99 respectively, so it looks to be a good deal for Congstar customers.

Sharing, gifting and charitable donations – 48, Ireland

48 is the sub-brand of Irish operator, 3.Its offer is a SIM only deal with 100GB for €10.99 / month. The company promotes data sharing, swapping of unused minutes for data, saving data, data roll over, charitable donations (where 48 will convert 1GB to €0.50 and donate to charity – up to 5GB / month). Customers are also able to borrow 1GB from 48 when their data runs out.

Build Your Own Plan -Yoodo, Malaysia

Yoodo is the digital sub-brand of Malaysian operator Celcom, which is part of the Axiata group. It offers a very easy to use and comprehensive plan builder where customers can select data volumes, voice minutes and number of text messages. Customers can also select add-ons for a wide range of services (e.g. 20GB Netflix / month for RM 7 / month -approx €1.40, 20GB Facebook / month for RM 3 / month).There is also an unlimited plan offered on two different speed tiers (3Mbps and 6 Mbps).

Customers can buy add-ons at any time. There is a free 20GB add-on for Boost. This is the mobile payment app from Axiata group. By giving free 20GB for Boost this is encouraging usage of this mobile payment service and increasing Axiata’s market share in the mobile financial services market in Malaysia. Yoodo also offer a Power Pass, which is a time limited offer – e.g. 100GB of data to use in one hour for RM2.

Group Plans – Smarty Mobile, UK            

The sub-brand of UK operator 3, Smarty provides group plans. These are clearly aimed at families as there will be a group owner who will manage and pay for all group members. Smarty provides a 10% discount for each SIM that’s added to a group.

Using Deals to Attract and Keep Customers – Visible, USA

Verizon’s sub-brand Visible has a range of deals to help entice new customers to join and stay. There are many deals advertised on its website and these are regularly updated. With the increasing popularity of eSIMs, Visible is encouraging new customers to use eSIMs by offering the first months’ service for only $5 if they sign up for an eSIM, which is a saving of $35.

Another example of a deal offered by Verizon is a $200 virtual gift card, which new customers will get after they have been paying Visible customers for two months.

 Avoid Cannibalisation of the Parent Telco’s Base – Very Mobile, Italy

One of the goals of Very Mobile was to ‘disrupt the disruptors’ after low-cost operators launched mobile services in the Italian market. But when launching a digital sub-brand, with competitively priced services there is always the danger of cannibalisation of the parent operator’s base. Very was able to avoid this, as it was able to develop offers aimed specifically for customers of new, disruptive service providers in Italy.

So customers of disruptive brands like IlIad or MVNOs like Postemobile are offered low cost (e.g. €5.99 /month for 50GB) offers. Customer of the established mobile network operators in Italy, such as Telecom Italia Mobile, Vodafone and Wind3 (Very’s parent company) are offered deals starting at €11.99 / month. Being able to focus on the customers of disruptive brands and MVNOs means Very Mobile can grow its base and avoid cannibalisation of its parent’s customer base.

The Ecological and Ethical Approach to Customer Retention – Felix Australia

Felix, the sub-brand of Australian operator TPG, will plant a tree for each new subscriber and continue to plant a tree every month that the individual remains a Felix subscriber. As for reasons for staying with a mobile company, this is probably one of the most ecologically friendly reasons for doing so.

Digital-first sub-brands have evolved in the last two years. Most started life offering lots of data for a low price and were aimed at students. We’ve come a long way since then as the use cases in this article show. From building new offers, to time-limited deals and customer management and retention programs the sophistication of the offers and the processes used by the sub-brands is increasing all the time.

However, as many of the digital sub-brands were unencumbered with legacy systems and processes, they can implement new processes and offers much quicker than the parent telco. What may have been complicated, cumbersome and expensive using legacy BSS in the parent telco is now agile, simple and fast in the Digital BSS used by many digital-first sub-brands today.

As such, many telcos are now trying out new offers and business models in with the sub-brand first before implementing in the parent brand, as the support systems in the sub-brand are faster, lower-cost and more agile than those in the parent telco.