Two tribes go to war
Heyah, the new giant in prepaid mobile phone subscriptions, has taken the market by storm and spurred a price war in the industry. Their strategy of focusing on prepaid users has pulled in more than a million customers in just four months. However, competitors have started to take major steps to adapt to the new, more crowded market and as a result have changed the landscape of the Polish mobile phone market. But, as the competition steps up in ferocity, the question is which operator's strategy will eventually win out.
Heyah's operator, PTC, has a market share of more than ten percent for prepaid phones, and their low prices and slick advertising campaign have attracted a younger audience who are more avid users of prepaid phones than binding contracts. However, its biggest competitor, Centertel, argues that Heyah's strategy of focusing only on prepaid users is a mistake.
"While our competitors have focused only on the prepaid market, we plan to focus on improving both of our prepaid and contract subscriptions," says Jacek Kalinowski, a spokesperson for Centertel, owner of the Idea network that plans to claw back market share with its new Pop service. And Idea's new Pop package will have prepaid rates that are even lower than Heyah's, as well as a simpler structure that includes flat rates and billing from the second minute.
Furthermore, Centertel sees its strategy as targeting a larger portion of the population, rather than just the youth market. As Poland's mobile phone prices are, relative to purchasing power, among the highest in Europe, this new competition between operators has been welcomed as further decreasing prices.
Despite Heyah's surging popularity and successful brand presence, Centertel remains optimistic about its ability to attract the same customer base and more with its lower rates and added features that Heyah lacks.
However, not everyone is as optimistic about Centertel's future. Analysts point out that its late start, months after Heyah's introduction, hurt Centertel's Pop sales. Andrzej Kasprek, equity analyst at Dom Maklerski Bank Handlowy, for one, points out that Centertel's late entry caused many of its customers to switch to Heyah, and that the only way to bring them back is for Centertel to engage in a fierce price war.
"We have yet to see if Centertel will be able to target young people the way Heyah has. Heyah established itself as a totally new brand very quickly, while Centertel will have to leverage itself off of its old brand, Pop, which will be more difficult to pull off," says Kasprek.
However, he is quick to point out that a lack of brand loyalty in the mobile phone industry may yet help Centertel regain its customer base if it is able to successfully market its new product. "There is very little brand loyalty in this market," Kasprek explains. "People will switch as soon as there is a 20-30 percent change in tariffs."
Heyah's operator, PTC, has a market share of more than ten percent for prepaid phones, and their low prices and slick advertising campaign have attracted a younger audience who are more avid users of prepaid phones than binding contracts. However, its biggest competitor, Centertel, argues that Heyah's strategy of focusing only on prepaid users is a mistake.
"While our competitors have focused only on the prepaid market, we plan to focus on improving both of our prepaid and contract subscriptions," says Jacek Kalinowski, a spokesperson for Centertel, owner of the Idea network that plans to claw back market share with its new Pop service. And Idea's new Pop package will have prepaid rates that are even lower than Heyah's, as well as a simpler structure that includes flat rates and billing from the second minute.
Furthermore, Centertel sees its strategy as targeting a larger portion of the population, rather than just the youth market. As Poland's mobile phone prices are, relative to purchasing power, among the highest in Europe, this new competition between operators has been welcomed as further decreasing prices.
Despite Heyah's surging popularity and successful brand presence, Centertel remains optimistic about its ability to attract the same customer base and more with its lower rates and added features that Heyah lacks.
However, not everyone is as optimistic about Centertel's future. Analysts point out that its late start, months after Heyah's introduction, hurt Centertel's Pop sales. Andrzej Kasprek, equity analyst at Dom Maklerski Bank Handlowy, for one, points out that Centertel's late entry caused many of its customers to switch to Heyah, and that the only way to bring them back is for Centertel to engage in a fierce price war.
"We have yet to see if Centertel will be able to target young people the way Heyah has. Heyah established itself as a totally new brand very quickly, while Centertel will have to leverage itself off of its old brand, Pop, which will be more difficult to pull off," says Kasprek.
However, he is quick to point out that a lack of brand loyalty in the mobile phone industry may yet help Centertel regain its customer base if it is able to successfully market its new product. "There is very little brand loyalty in this market," Kasprek explains. "People will switch as soon as there is a 20-30 percent change in tariffs."
