The telecom operators are fully equipped right now. While Telia and Telenor have a battle for Nordic domination Tele2 has done the opposite and abandoned the other Nordic countries. However, there are still ambitions in the Baltics.
The increased investment in the corporate market has been made through the acquisition of TDC. But right now Tele2 is putting a lot of energy into the consumer market and even there it is a big deal that is in the center, namely the purchase of Com Hem which was presented a year and a half ago. Nowadays, Tele2’s former CEO Samuel Skott is responsible for the consumer market in Sweden.
-We have a clear strategy to invest in Sweden and the Baltics and focus on those markets and it is based on the insight that there is a need to be able to be a full-service player in the consumer market, he says.
For the new organization with both Tele2 and Com Hem, the concept of fixed mobile convergence, FMC, is at the center. It’s about creating the best experience when merging fast and mobile connections and this is also where Tele2 puts a large part of its gunpowder just now with broadband, TV and play services for the entire household.
– This is one of the operators’ greatest opportunities to meet customers and the reason why it is the case that there is often a desire to change. We want to be able to get benefits from being with an operator to increase loyalty. Already in the initial phase, we have gone out to joint customers with an acquisition offer to customers who had both fast and mobile, and among them we have seen that we have already halved our churn as a direct effect of the deal, says Samuel Skott.
What kind of offers are these?
– It can be things like double the amount of data on the mobile, extra SIM card free of charge or double the speed of your broadband.
For him as consumer market manager, with responsibility for the brands, it can also be a lot when it comes to working with the Tele2 brand. The work that is being done now is a way to position Tele2 as a premium brand, which has not been as easy before.
– Our main brands Tele2 and Com Hem have had difficulty building greater strong value to be able to justify differences in price. From a consumer perspective, Tele2 could primarily offer mobile and Com Hem TV and broadband. Both companies have had a good trip in each direction and now that we continue to gather towards becoming the leading provider of connection and entertainment services, we need the entire range. What is extra fun is that all our initiatives have been received positively by customers who can be very good answers, says Samuel Skott.
At present, there are four brands that Tele2 works with: Tele2, Comviq, Com Hem and Boxer. The plan is for the four to become two in the future. Boxer will be incorporated into Com Hem and Tele2 / Com Hem will continue under one and the same brand. Which will be harder to answer.
Will you take a new name?
– I do not think so. Let me guess, we share one of the two. We market both today. The most important task now is to make everything work well together and then take it further from there and merge it. It is a rather luxurious situation to sit with two strong brands.
One could not guess that Tele2 is a bit divided in the fight because it will live on in the corporate market. Historically, Com Hem has not directly been a brand that customers rejoice over either, but if you ask Samuel Skott, he emphasizes in that case that it is just history.
– Com Hem had a hugely bad reputation a few years ago but has made a fantastic journey. Thanks to investments in both networks and products, we now have a broadband service that is very strong and, among other things, broke a Guinness world record in connection with Dreamhack in Jönköping. And they have also worked hard with the range and customer service, so the Com Hem that exists today is infinitely much better than what you came from, he says.
The brand that will certainly remain, but which does not enter the premium segment, is Comviq.
– We will continue to invest in that, and there we will continue to make it cheap, simple and neat. Everything we do with Comviq should be based on the three words.
The Swedish battle within FMC is of course against two main rivals Telia and Telenor, where Telia’s deal with Bonnier continues to drag on and where Telenor already has, among others, Bredbandsbolaget. And we have previously found many subscribers and a very significant part of the operator war. Samuel Skott says that the main goal for Tele2 / Com Hem is now to refine and take care of customers.
– Our main focus is not to hunt for new customers now, but rather to work with those we already have and build strong loyalty.
So running around and attacking people with new subscriptions is no longer relevant?
– We have worked away a lot of that type of sales in the industry. This is not what customers want today, it just creates badwill. The important thing is that our customers stay and are satisfied and loyal so they want more products from us and which can then help you get better offers. For example, we are the only company today that can offer everything on the same invoice, with a customer service. We know that the customer demands it.
This is how the service revenue from the end customer for Tele2 Sweden 2018 is distributed:
B2C – 75 percent
B2B – 25 percent
Operating margin (underlying EBITDA excluding IFRS 16) for Tele2 Sweden 2018:
B2C – 36 percent
B2B – 22 percent