Malaysia’s telecoms players have been busy. In the past few months, Telekom Malaysia, Digi and UMobile have all launched a media or creative pitch. Among the market’s major players, only Maxis seems to have stuck by its agencies.
The huge turnover reflects a highly competitive sector marked by new product launches and cost-driven marketing. Lara Hussein, CEO of M&C Saatchi, which handles Telekom Malaysia’s Celcom account, feels that, since pitches have been mostly for the media part of the business, the brands may simply have been looking to negotiate fees. Yet, for agencies, the sector remains attractive as it is predicted to keep its spend stable despite the economic crisis.
One reason for the spate of pitches is the margin pressure on telecoms companies, which are seeing lower average revenue per user (ARPU) and in turn need to increase ARPU through advertising. There are also growing competitive pressure on the major players. Last year’s introduction of mobile number portability made competition between operators easier, while Digi finally picked up a 3G licence this year, allowing it to offer rival services to Celcom and Maxis.
Celcom, Maxis and Digi have been aggressively launching new offerings, such as broadband services, new phones and various kind of hardware. Maxis recently launched the iPhone and Windows Live Messenger, while Celcom launched BlackBerry Storm and a new service called M Commerce. The telcos are also competing with Wimax players such as P1 and Asia Space for a piece of mobile broadband market. To add to the excitement, smaller players such as TuneTalk, a mobile company operated by Tony Fernandes, want to enter the budget mobile market.
Hussein notes that the market has boiled down to “who innovates and launches first”. She argues that this competition has led to telco advertising “evolving in line with consumer needs and the marketing landscape.” Hussein argues that there has been a renewed focus on “product and retail ads” - as opposed to emphasis on “corporate branding or customer service” - to match the high number of product launches. She adds that Celcom has embarked on a marketing strategy where it has clearly segmented its consumers into various groups. “This allows all communication to address these segments directly.”
However, one advertising agency head feels that even though telco advertising has evolved from tit-for-tat ads, it is too price- and promotion-driven.
“Most ads will use words like lowest and cheapest and if there were no colour differences we would not be able to distinguish one player from the other. No single telco player has really gone far ahead of the other in terms of branding. But the dilemma is that if you do try the tactical play you might not get the numbers you want.”
Prashant Kumar, CEO of Mediabrands in Malaysia, agrees that telco advertising, especially media planning and buying, still has some way to go.
“In terms of media planning and buying I think the focus is on the first stage of media operations, which is how to spend the money in the smoothest way possible. Telcos are under pressure to outspend the competitiors, but the focus should now be on outsmarting them. They need to move beyond brute force marketing and look at the revenue that they are getting for every media dollar.”
According to him many of the campaigns “are too reactive” which turn “marketing into a zero-sum game rather than creating value or genuine changes.”
Whether the brands’ new agencies will be able to change that problem remains to be seen.
Got a view?
Email Feedback@media.asia
