Published in Jan-Feb 2023
What a heavy burden is a name that has become too famous...” Voltaire’s words could not be more felicitous for the one telco that everyone is talking about.
Telenor’s performance, low earnings, and the worrying effects of dollar-parity, all have, unfortunately, increased the burden on a brand name that once was highly efficacious. A reported impairment of $244 million in July 2022 and an earnings drop of 22% in Q3 2022 have heavily overshadowed its Pakistan operations.
Rumours of a merger or even an outright exit were omnipresent even in 2021. Whilst Telenor’s CEO, Irfan Wahab Khan, tersely denied the speculation at the time, there was no argument left when Bloomberg published the news in early November 2022 that Telenor ASA is indeed working with Citigroup to sell its Pakistan operations at an estimated value of one billion dollars.
To date, most of the conversations regarding Telenor have revolved around the financial implications of a merger or a sale. As Business Recorder and Profit Pakistan have already covered the nuances of this scenario in an admirable manner, I felt it more pertinent to dedicate this space to the lesser-mentioned implication i.e. the Telenor brand name. And the mastery behind building it.
In the fog that has enveloped Telenor recently, it is easy to lose sight of 2005, when two foreign telcos entered Pakistan at the licensed invitation of the Pakistan Telecommunications Authority. One from Norway. The other from the UAE. Both brought with them a cultural dimension that Pakistan had not seen before.
Expectations were sky-high, and as Telenor was scheduled to offer services first, an arresting launch was awaited in March 2005. Industry observers (including myself) were somewhat disappointed when Telenor did not provide the enthralling launch we all wanted to see. In hindsight, however, the Norwegians did not stray from their cultural ethos, which is defined by tolerance, self-sufficiency and “not bothering others.” They quietly, but professionally, went ahead with the business of offering an outstanding and sophisticated telecom service, both in terms of technology and branding.
Two months later, the public did get the grand spectacle they had been waiting for when Warid’s launch gained the telco one million customers in less than three months and a seven percent market share. At one point, Warid had the largest postpaid user base in Pakistan, supported by the most superior data network in the country, based on its infrastructure partnership with Ericsson and a technology-neutral licence. Most significantly, it had the highest postpaid ARPU, putting even market leader Mobilink to shame.
Whilst Warid concentrated on urban centre expansion, Telenor opted for brand building. The focus was sharply on two things: long-term perception and research. This approach was most evident in the way it promoted its ‘youth brand’ Djuice.
Borrowing from its success in Bangladesh, Telenor launched Djuice in Pakistan in October 2006. At the time, its only competitor in this ‘new’ segment was Jazz Octane as Warid’s Glow and Ufone’s Uth were not yet launched.
Telenor used insights which seem a given now but were ground-breaking at the time for emerging markets especially. These included segmenting packages according to day and night usage, teenage-specific marketing campaigns depicting a ‘cool’ and ‘trendy’ lifestyle, and heavily (but smartly) promoting SMS and GPRS (2.5G) packages.
Telenor capitalised on research insights from its other youth markets (Bangladesh, Hungary) which showed that ‘social influence’ greatly affected the usage habits of teenagers. In other words, if your friend was on Djuice, you were likely to be too and to recommend it within your friends’ circle. This concept of ‘social influence’ was, at the time, being used on a trial basis even in mature telecom markets such as the UK by O2 and Vodafone – showing how tremendously confident Telenor was in experimenting with this new mobile marketing concept in a market in which it only recently had stepped into.
Telenor did not use social influence merely to gain subscribers for Djuice – it applied mobile data analytics to determine which user in a given friends’ circle was most influential and aimed highly-targeted SMS/GPRS campaigns at that individual in order to promote specific packages/deals within a high-reception group. An individual was likely to forward the most messages within the circle, thereby guaranteeing high engagement, loyalty and, most significantly, higher earnings per user. A technique milked and perfected with unprecedented success by the social media platforms we all now love or hate, namely Facebook, Instagram, and WeChat... Their strategy was so successful that it forced a relaunch from Jazz Octane in 2009 whilst Warid’s Glow never even managed to touch them.
Telenor’s mobile data analytics were so impressive that as an academic associated with the IBA, I formally approached them in 2010 to research and publish a case study on their marketing strategy. Having researched this topic in the UK prior to that, I was duly impressed by the way Telenor’s marketing team had set out their mobile marketing strategy in order to introduce methodologies that could reverse the decline in ARPU that the industry was starting to suffer from as a whole. Their data segmentation was based not only on the standard geographic and ARPU-specific data points but included psychographic and behavioural user proxies, such as ‘tech-savviness’ (based on GPRS/Facebook usage) or ‘music lovers’ (based on their subscriptions to Telenor’s SmartTunes service). They also incorporated historical analysis of certain user groups for follow-up campaigns to provide improved engagement for brands that were trialling their mobile data analytics – all far ahead of its time.
Perhaps most well-known today (also the subject of many academia-backed case studies) was Telenor’s highly assertive departure from the standard bit-pipe telecom strategy model to the smart-pipe one – with the introduction of Easypaisa – thereby becoming the first telco to establish mobile financial services.
Hence, for many years, it seemed that Telenor, the ‘smart’ telco, could not go wrong. Sadly, the veneer of the Telenor brand did suffer inevitable damage as the harsh realities of the Pakistan market started to take effect. Persona, Telenor’s postpaid brand could not compete with the ingenuity of Mobilink’s Indigo or Warid’s phenomenal postpaid ARPU standing. Tameer, the banking arm of Easypaisa, sustained losses from a reduced loan base and poor management. As 60% of its branchless banking income is derived from money transfer services, it is struggling to offset the losses already suffered in this area with Raast implementation gaining momentum.
What saddens me most, however, is that the incredibly smart brand building and analytical marketing executed by Telenor in its formative years were not carried over to more recent ones. Telenor too fell into a laissez-faire slumber as telecom strategy in Pakistan became a numbers and low-cost offerings game.
The new buyer of Telenor, whoever it may be, could well succeed at cost-cutting for operational efficiency, but the asking price will not be enough to ever regain the vibrancy and spirit of the Telenor brand. Nor the ethos of a company that largely laid the foundations of telecom strategy in Pakistan. Break-out brands like TalkShawk, the faded remnants of which can still be seen on a few half-broken village walls on the road from Sehwan to Kandiaro will never grace us with their exceptional presence again...
Yasmin Malik is Senior Partner & Consultant at Global Management Consultants, Dubai.