Black hole of convergence threatens to swallow telcos

Interbrand advises operators to focus on their brands to differentiate themselves; touts importance of ‘listening’ in a changed marketplace.
Fully understanding the role of their brands in the market will be crucial to telecoms operators’ strategies as the industry emerges from the current economic downturn, advised Jez Frampton, global CEO of Interbrand at Broadband World Forum Europe on Tuesday.

“What people here need is a very clear understanding of of how your brand operates,” Frampton told a panel of telecoms operator executives and a busy auditorium.

Frampton warned against telcos getting sucked into “the black hole of convergence”.

As the main players in the telecoms, technology and media segments draw closer together, it is extra important to be able to stand out from the crowd, Frampton explained.

“Over time products and services become parity and the thing that makes the difference is the brand,” he said.

Frampton named Apple as an example of a stand-out brand, suggesting that the much-loved consumer electronics maker sends the message that it has the ability “to look after” its customers.

“The Apple iPod is not by any means the best MP3 player ever made,” he said. However, it is the most popular by some margin.

Frampton also urged the operators not to underestimate the value of strong partner brands. Unlike in the early days of WAP, when operators took a walled garden approach in a bid to prevent brands other than their own reaching the customer.

“Understand where you can add value and where your partner can add value,” he said, advocating the creation of “little networks of brands”.

The brand is particularly important given the current economic climate.

The nature of trust in organisations has changed in the wake of the banking crisis, Frampton said, urging the telcos to take a step back and listen to their customers.

“God gave us two ears and one mouth,” he said. Listen to the customers – “you might find your market has changed around you and you didn’t realise it was happening.”

“It’s all getting quite complicated, and then along comes someone like Apple,” and made it fun again, he said.

“Everyone needs to understand that [trust has changed],” he concluded.

“Successful innovation comes out of very good listening.”

This article originally appeared on Total Telecom