News

KPN abolishes its Hi subbrand - TCL looks at other subbrands and establishes that even when a sub brand service is offered, the established MNO continues to experience a decline in service revenues.

Published: Wed 6 May 2015

March 2015 there was mixed news for the sub brand. Swisscom announced that it would be introducing a low cost fixed Broadband sub brand from April, and that KPN would be abolishing its Hi mobile sub brand from the beginning of May.

The proliferation of telecoms sub brands has taken place in a number of countries as established telecoms providers experiment with the launch of sub brands.

Traditionally the sub brand launch has had one of two purposes –

1.To serve as a low cost brand, without diluting the established mass market brand

2.To address a different segment, typically the youth segment, with a youth orientated brand

MNOs have established sub brands either via acquisition or by resurrecting an earlier brand:

In France, Orange acquired the M6 MVNO mobile brand, which is now established as a low cost youth-orientated brand.
In Sweden, Tele2 adopted COMVIQ as its main Pre Pay brand in 2012 after merging with Comviq in 1997.
In Germany, OTELO (a former Mannesman subsidiary) was launched by Vodafone as a low cost provider.

TCL concludes that the telecoms sub brand faces a series of challenges. Particularly in Europe, the price gap between the entry mobile or fixed Broadband price point offer and a bundled service offer is narrowing. MNOs are increasingly offering bundles of mobile data, calls & SMS at low price points, even without a sub brand offer.

As markets mature, telecoms operators are offering 4G data services as standard, with 4G services also being offered as standard by some sub-brands such as simyo (but at 20 Mbps speeds). But the availability of 4G service bundles at all price points can undermine the need for the telecoms sub brand.