Wednesday, September 24, 2008

What is the Swedish Mobile Phone Operator Tele2 Up To?

We have learnt that it is always important for a company to have a product and price strategy which is designed in such a way that you do not run the risk of losing customers to your competitors. Instead is should be designed in such a way that it attracts customers away from your competitors. To achieve this it is it important to put forward attractive offerings with competitive prices in the market. To be able to do that you need to have good business intelligence which helps you to understand what the trends in the market are.

I do not know if I have missed something here, but the Swedish mobile phone operator Tele2 seems to be an interesting case on how you should not go about concerning these matters. I suspect that something has gone terrible wrong here.

Tele2’s services and pricing seems to be out of phase with the trends in the market and with their competitors’ strategies. Competitors such as e.g. the mobile phone operator "Tre" seems to understand that the development on the market goes towards offering subscriptions which includes possibilities to surf on the web with the mobile phone and to sell discounted phones in relation to selling subscriptions. Here where the trend in consumer mobile behaviour is that surfing becomes more and more important relative to talk.

What has Tele2 done? Besides a fixed price subscription, they have only two subscriptions too chose between when it comes to talk in the mobile phone. In addition, earlier they offered the customer the possibility to add the service of surfing on the web with the mobile phone to the subscription. The possible maximal surfing speed for that service was 7.2 Mbit/second. The prices were very modest - 39 SEK/ month for 1Gbite and 99 SEK/month for free surfing.

Now they have abolished this offering. Instead they only offer the customer a surfing service for mobile phones with a speed of 0.384 Kbit/second. At the same time they have raised the prices radically. In addition to this, their allowance to customers who wants to buy a mobile phone in relation to a subscription is very low. This compared with a competitor such as "Tre".

So what is Tele2 up to? Well, I have to admit that I’m a bit clueless? This because the strategy seems to be plain wrong. The consequences seem only to be that Tele2 will give away their customers to competitors such as "Tre" and TeliaSonera.

I may be wrong here, but Tele2’s current strategy seems to be very dangerous. They do not seem to have grasped the current trends in the market. When the desires of the customers in the market changes, they changes very fast. If you then are not well positioned, your will lose customers to your competitors. And right now, I do not think that Tele2 has understood what a good future position on the market should look like.

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