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Broad band

By Russell Brown

Sunday 1st June 2003

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First there was the little present for turning up at Telecom's media and analyst briefing: a $1500 Kyocera smart phone, incorporating a Palm PDA. Then, after a week-long teaser campaign, Vodafone sent over its present: a sexy little Sharp number incorporating GPRS and an onboard digital camera.

Then Nokia's PR company got on the line about its new CDMA phones. Would I like to look at five phones? (They only sent three in the end, mercifully.) Microsoft booked a swanky show apartment at Auckland's Viaduct to launch a new range of Sony Ericsson phones running Microsoft software: five months away yet, but, hey, just so you know we're in the game, okay?

Clearly, something is stirring in the mobile phone market.
Actually several things are stirring (see Technofile, page 72). And probably the most interesting is the new vision of itself that Telecom presented at "From the Telecom Shed to Your Place", the briefing where it gave away the phones. In the merger- and acquisition-happy late 90s, Telecom put its constituent businesses in silos, ready to be spun off for cash if necessary. Maybe it was going to sell Xtra. Maybe it was going to buy Optus.

It did neither. Indeed, the new philosophy is predicated on Telecom keeping and exploiting its breadth in the market - fixed line, mobile, internet, data, broadband - in such a way that it appears as a single proposition to the consumer. There's no clearer illustration of the strategy than the unprecedented closeness of its mobile division and its nine-year-old internet business, Xtra. The two divisions have quite a bit in common: they both face outside competition, and they have a certain cultural affinity. "We don't talk about structure so much any more," a Telecom executive told me. "We talk about common goals." So it's not your dad's Telecom any more. But what does it all mean?
When Vodafone set up for business in New Zealand it brought with it a fondness for key sports sponsorships that had served the company well in other territories, and, as we now know, has done wonders for the brand in New Zealand. Telecom has backed rugby in recent years, but doesn't seem to have derived the same brand leverage as Vodafone has from the Warriors and the Silver Ferns.

But this year's Xtra sponsorship of Super 12 rugby is different. It may well be the most important strategic sponsorship the company has ever undertaken, because it actually puts the new philosophy into practice.

Xtra not only hosts the official websites for the competition and the New Zealand teams, it has been styled as the engine for information about the Super 12. Fans sign up at the same page on the Xtra site for free news and updates to be delivered by email or as free text messages to 027 mobile phones.

A quarter of a million of those messages were delivered to 027 subscribers in the first month of the competition, making it, according to Xtra, the biggest mobile news operation yet seen in New Zealand. This content is, in turn, tied into the Virtual Super 12 picks competition, which is copyright to the New Zealand Rugby Football Union but thoroughly emblazoned with Xtra and Telecom 027 branding. In keeping with the new model, the same login lets the 76,000 Virtual Super 12 players make their picks from either their PCs or their 027 phones.

Telecom, it appears, has finally worked out what Xtra is: a content engine for its whole business. The instant messaging service unveiled at the briefing follows the same model - one lot of content and services, and a common experience across multiple devices, fixed and mobile. Telecom will look to expand this philosophy across the range of its services, including its yet-to-be-defined bid to take its broadband network to the living-room TV.

Mobile is a logical, if not necessarily easy, place to start. In a reversal of the situation when Vodafone entered the market, it is Telecom that presently has the better technology; its CDMA-based Mobile Jetstream works far better than Vodafone's GPRS solution for data. The instant messaging service is undeniably cool. Xtra theoretically offers much more than Vodafone's new content portal, Vodafone Live. But Vodafone still seems able to present itself as the hip option. The phones tell the story. The Kyocera phone from Telecom is the best handset I've ever used: robust, clear and remarkably functional. Vodafone's freebie is light, sexy and toylike. Guess which one people are talking about.

In the years when Telecom lost so much new business to Vodafone, its advertising tended to show middle New Zealand itself. But Vodafone knew that mobile telephony was innately personal and aspirational: it showed people what they wanted to be.

Telecom's new marketing seeks to harness a similar aspirational energy for all its products: to not only show people what they want to be, but encourage them to think about what they may wish to do in the future. And to emphasise that this really isn't your dad's Telecom.

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