PCCW takes battle to VOI challengers in HK

PCCW is stepping up its push to position the telephone as a family communication tool in four 15-second spots created by J. Walter Thompson, which had earlier helped the telco promote its year-old fixed line SMS service with a quiz-based campaign (Media, August 27). The spots highlight new features PCCW has introduced such as bill payment as well as cookery, financial, football and racing tips by experts in those fields which fixed line subscribers can avail of. Rita Li, director of consumer marketing at PCCW's consumer marketing and business management division, said the telco's strategy was based on offering services with daily applications to differentiate itself from its rivals' price-based offering PCCW is not permitted by Government regulations to compete on price because of its status as the dominant carrier with an estimated 70 per cent market share. However, its rivals are not bound by a similar restriction and have competing aggressively on price on the back of their new VOI-based telephony offers. Li said the new fixed line features had been created with different target segments in mind. The SMS offer is directed at kids and teens, the cooking tips service at housewives, and football and horse racing tips at the male market segment. As an indication of the category's intense competition, PCCW boosted its adspend from about HK$43 million for the first nine months of last year to $53,000 million, according to Nielsen's Adex figures. "In the past two months, there have been about four operators who have introduced VOI services in one way or another," said Peter Hung, marketing head at New World Telecom. New World and China Motion both launched VOI services early this month, joining rivals Hong Kong Broadband, Hutchison and Wharf T&T, which also market web-based telecom services. "We are talking about all the major operators introducing VOI except the incumbent because of its fixed line baggage, it cannot afford to cannibalise its service," said Hung. New World launched its NetTalk and broadband phone service early this month, giving the first 10,000 subscribers unlimited free trials until December 31 through an online registration scheme. Priced at $39 for broadband users, NetTalk works on Microsoft Windows platform to provide internet users with voice services comparable to traditional telephony services, according to Hung. Another contender, Hong Kong Broadband has launched a price-led offensive with expensive consumer electronic giveaways to lock subscribers into contracts of a minimum of 12 months. Its TV spot is fronted by local celebrity Dodo Cheng, who is seen to represent value-for-money from her years as a spokesman for best value deals in campaigns for a local supermarket chain.