Marketing In A Recession: BASE Stages Radical Portfolio Transformation

| Apr 21, 2009 | Wireless Services - Europe | Competitive Update

| Analyst: Emma Mohr-McClune

Current Perspective: Moderate/Positive
Vendor Importance: High
Market Impact: High

Event Summary

April 20, 2009 -– BASE announced a complete portfolio re-fresh, with adapted tariffs, to make mobile communications more simple and affordable for everyone. The best performing existing tariffs have been re-modeled to offer more minutes, more SMS bundles at a lower price. The new portfolio now consists of a single prepaid service and four postpaid tariffs, with additional ‘options’ (unlimited SMS and Surf and Mail data) available on a bolt-on basis.

Analytical Summary

• Current Perspective: Slightly positive on BASE’s services portfolio transformation, as a broad and bold tariff reform move which is guaranteed to win both consumer goodwill and market attention. BASE’s emphasis on simplicity, transparency and pricing comparison is right in line with the recession-charged spirit of the times. However, with this ‘back-to-basics’ move, BASE risks looking more like a no-frills provider than ever.

• Vendor Importance: High to BASE, as this portfolio transformation will help the operator reiterate its ‘Freedom of Speech’ brand signature in the budget-sensitive context of the ongoing recession. This move, together with a new TV and radio campaign, represents compelling and original marketing opportunism from the market challenger.

• Market Impact: High on the Belgian mobile consumer market, as this portfolio overhaul will be difficult for competitors to match on an individual service-for-service basis, and any effective competitive response will need to be along the same big-picture lines. At a time when other operators are attempting to nurture monthly spend via bundles, value-added service padding and rate hikes, BASE seems more in tune with consumers’ more immediate requirements for simple, cheap, no-nonsense mobile services.

Recommended Competitor Actions

• Competitors should note how BASE’s new services portfolio pushes the envelope on ‘unlimited’ on-net and any-net calling. New services such as BASE 3 and the higher-value BASE 5 will require competitors to scrutinize their own plans to gauge competitive equity.

• Proximus should note that BASE’s new portfolio transformation is awkwardly timed to highlight the planned Proximus/Belgacom rate hikes, set to come into force on May 1, 2009. Proximus will now find it harder than ever to justify its ‘below inflation-rate’ call and SMS charge increases in the light of BASE’s new attack, and should re-think this approach.

• Proximus should mobilise its UglyDuck brand to respond to the new BASE prepaid rate attack. The new BASE prepaid rates undercut UglyDuck’s basic prepaid calling rate in the higher increments. Proximus cannot afford to allow BASE to offer lower prepaid rates than its own low-price secondary brand.

• The BASE services portfolio shake-up provides Mobistar with another opportunity to highlight its higher-end device line-up, notably the iPhone, as well as its more sophisticated mobile data services. Mobistar should resist competitive response on a like-for-like basis, and think about reiterating its value-added market strength.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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