Magazine article Marketing

News Analysis: Easy Pickings?

Magazine article Marketing

News Analysis: Easy Pickings?

Article excerpt

Stelios has spied an undercutting opportunity in the mobile market Ben Carter weighs up easyMobile's prospects

At some point in the creation of easyGroup, the bright orange empire lost its sheen. Stelios Haji-Ioannou can still draw media crowds with an announcement of his latest venture, but the sense is they are there more in the hope of seeing a car wreck in the making than to witness the birth of a great new business.

Such is the case with easyMobile, the no-frills pre-pay mobile service announced last week by Stelios. Sure enough, national newspaper coverage so far has called into question the basic premise of the business, highlighted easyGroup's recent poor track record in launches and seized with undisguised glee on the inevitable legal showdown between the orange entrant and the established mobile operator that appears to own both the name and colour.

Stelios has an uncanny ability to shake off such negativity. There are few business leaders who would call a press launch without having an agreement with a network carrier in place, with scant detail on how the service will work and only the vaguest of promises about making a priority of customer service.

It is fortunate, then, that Stelios makes up for in belief what he lacks in business detail. Despite the kneejerk scepticism and undoubted challenges it will face, easyMobile fits the easy template well. In a 2003 interview with Marketing, Stelios said: 'I'm constantly looking for industries where people will consume more if the price is right. We'll only go into an industry if we think the cost structure is about half that of the incumbents, allowing us to offer half their prices.'

Cheap proposition

Price, for easyMobile, appears to be all. It is the basis of the business, yet also the sticking point with the major mobile operators. While industry observers believe Stelios will agree a deal to carry the calls, most likely with T-Mobile or Vodafone, their models couldn't be more different. The mobile networks attempt to drive up users' expenditure, while Stelios' approach is to offer 'the cheapest calls on the market'.

The easyGroup characteristic of stripping out cost is highly evident in the easyMobile proposition, with few business overheads. It is a SIM card-only service, which will provide basic voice and text calls, and none of the extras many customers take for granted, such as voicemail and data services. As with every easy business, the internet will be the primary sales channel for the SIM cards, rather than retail outlets. …

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