Subject to an increasingly competitive telecoms market, challenger operators must integrate familiar/legacy growth approaches with refreshed strategies and technologies to grow.
There is no one-size-fits all to challenger approaches to the European market; challenger telcos are leveraging different growth strategies including FMC, sub-branding, more-for-more, and 5G/FTTH leadership.
Challenger operator, Masmovil Spain, leveraged inorganic growth to build a plethora of sub-brands, which, in parallel with critical deals with Orange Spain & Telefonica Spain have enabled it to be competitive on the Spanish market.
Masmovil has adopted a range of different strategies, taking advantage of its multi-brand approach to utilize several positioning strategies in the market. It leverages more-for-more, data-abundant value propositions across its premium brands. At the same time, it has adopted a simplified and clear unbundled/non-forced bundling offering for its entry-level customer segments.
The telco is also focusing on agility and cost control. Masmovil has embraced a lean corporate structure, with lines-per-employee as a key KPI to help manage costs. In addition, Masmovil’s national roaming and network sharing deals have helped accelerate its services time-to-market, while helping reduce costs – e.g., its network sharing agreement with Orange will help the telco save EUR40 (US$48) million a year from 2021 onwards.
Masmovil is also focusing on digital customer experience. Masmovil has integrated the self-service and e-care provision into its multi-brand tech platform, which has shifted 80% of customer interactions and 40% of sales into digital channels.
Sunrise launched 5G in 2020, delivering a differentiated B2C/B2B 5G value proposition. Moreover, its acquisition by cableco UPC will strengthen its ability to leverage FMC to cross-sell/up-sell across fixed and mobile segments.
Sunrise was acquired by UPC (established cable provider) in 2020, in order to achieve greater scale against incumbent Swisscom. The combined operation constitute a strong number two in the Swiss market; with a 34% subscriber share in the fixed segment and a 24.6% subscriber share in the mobile segment in 2021. This will drive Sunrise UPC’s ability to further leverage Fixed Mobile Coverage (FMC) as a subscriber and revenue growth engine.
Sunrise’s value proposition is another differentiating feature as it is closely driven by both FMC and streamlined offers. Sunrise capitalizes on its position as an integrated service provider and continues to use cross-selling and up-selling strategies to expand its market share, leveraging FMC.
Sunrise’s IoT/M2M portfolio is another success factor. Sunrise partnered on IoT projects with Virtuelle Fabrik in February 2021, a network of Swiss companies in various innovation, development, and manufacturing sectors, to drive its portfolio of IoT/M2M offerings for businesses.
5G gives opportunities for growth
Sunrise was the first to launch 5G in Switzerland, and also to introduce a range of 5G home broadband & mobile workplace packages to compete more effectively in the fixed space against Swisscom. Also, the telco is covering distinct customer segments, through Lebara, Sunrise, Yallo, and UPC/Sunrise for Business.
The use of the multi-brand approach has allowed Sunrise to achieve a greater degree of market coverage, with the telco being able to leverage a variety of positioning approaches in the Swiss market. Sunrise has also started focusing on the underserved markets that had not been targeted by Swisscom such as the price-sensitive segment with a sub-branding and streamlined unbundled offers.
Sunrise has also shifted its focus to more customer centricity and sales channels improvements, aiming to deliver a higher proportion of sales across digital channels, as well as improving services within its existing digital channels through smart customer service platform integration.