Cellcom’s vision of the mobile world



In the beginning of the week, TheMarker published an extensive interview with Cellcom CMO, Adi Cohen named “Cellcom will became a content brand”. Actually Mr Cohen expressed his opinion in a full spectrum of mobile issues. The main points are listed below:

  • Due to the economic crisis Cellcom will probably reduce its image oriented activities and will focus on the “hard sell” campaigns.
  • The crisis will strengthen the advertising in printed media and Internet against the TV (as it’s cheaper and effective)
  • Partner’s expansion to the new markets (fixed telephony and ISP) will provide Cellcom an opportunity to increased growth in the mobile market.
  • Cellcom has decided to became a content provider and to further improve and develop it’s WEB-portal. The target is to became one of the most visited sites in the Hebraic Internet.
  • Cohen praises the very successful partnership with Logia company – the exclusive provider of media content for Cellcom. He also expresses his opinion that the existing business model, when Logia which is not part of Cellcom actually operates as its contents department, is the best one possible.
  • Cohen assumes that in the near future Google and other web giants won’t compete directly with mobile operators’ but will rather try to seize control over user’s movement inside the mobile device.
  • Cohen claims that the zmanismoney project is a success but still adds that mobile advertising won’t became a significant part of the pie in the near future.
  • As a result of a number portability program Cellcom has improved its performance. Churn rates rose from 3.7% before the launch to 5% after the launch.
  • Cohen expresses a strong negative opinion about the MVNO launch project. Israeli market is highly saturated and there is no space for operator without infrastructure investment expenses.

And I think:

  • If Cellcom don’t follow Partner and enter the the market of fixed telephony and especially ISP, after some time it may become difficult to match Partner’s bundled offers. In some way it looks much like the situation between Bezeq (which due to regulation limitations) provides only fixed lines and HOT telecom which offers to its customers a triple-play bundle of telephony, TV and broadband.
  • About the decision to become a content brand: as far as feel and understand, in many cases consumers don’t link between content and quality. Moreover, many think of content (and especially mobile content) as a way to “kill” some time, to rest and so on. While mobile operator’s top-of-mind qualities must include reliability, quality etc. We’ll see how Cellcom’s team will solve this contradiction and these very different values into one brand.
  • The number portability. It’s funny that Mr. Cohen talks about the success of the initiative. All mobile carriers had done their most before the portability was launched in order to block it. When he talks about the rise of the churn rates he forgets to mention that churn rates in the developed countries are as high as 40%. Never mind what are the reasons for this situation, we have a long way ahead of us…
  • The MVNO issue. There is a fully understandable resistance to the creation of new competitors whether they are MNO’s or MVNO’s. Yet, as I wrote in September, Cellcom is already preparing itself to the change and planning to launch an MVNO of it own.

One Response to Cellcom’s vision of the mobile world

  1. stavik says:

    Hi mic, regarding the triple play issue, cellcom was the first mobile operator in israel to offer business customer an ISP service and fixed telephony. The cellcom brand is 27% owned by IDB group which also holds 3% share in Netvision (http://www.idb.co.il/Default.aspx?id=167).
    That opens the way for cooperation between the ISP (Netvision) and the mobile operators through revenue share bundles.
    That’s why I don’t believe that Cellcom will be left behind in that area.

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