If early trading is anything to go by, BT's spin-off flotation of
mmO2 is going to be more successful than anyone could have predicted a
couple of months back. MmO2, which began trading officially on Monday,
is now the holding company for the BT division formerly known as BT
Cellnet. Stage one of its reinvention successfully concluded, the
company will gear up for a wholesale rebranding of its consumer
From next spring, Cellnet's services will trade under the O2 banner and
this new brand name will also apply in the company's other European
markets - it has subsidiaries in Germany (previously Interkom), the
Netherlands (Telfort) and Ireland (Digifone). Rebranding will be backed
by a £150 million above-the-line advertising campaign, through the
BBDO network. And last week mmO2 also appointed Agency Republic to
manage the O2 brand across digital channels including the web, mobile
phones and interactive television.
This, in itself, is worthy of attention because this time around digital
advertising is to be fundamental to the rebranding campaign.
And we're being promised something a bit special and innovative from the
agency. Much is expected - and Agency Republic, which has a
long-standing relationship with the company (for instance, in its recent
work for its mobile internet portal business, Genie), will not
underestimate the nature of the task ahead.
This sort of thing is meat and drink to the cynics but you can't charge
mmO2 with lacking confidence or ambition. It's all about putting
wireless on track following the WAP debacle. Having failed to deliver
the third generation in mobile (the first was voice telephony, the
second was simple SMS texting, the third was meant to be full internet
access), it now plans to secure generation 2.5 (e-mail enabled devices
such as the Blackberry gizmo BT has been punting over the past couple of
Cynics will argue that changing the brand name to the chemical symbol
denoting one of the constituent gasses in hot air won't change
And the heritage problem is complicated. It has to take its customers
into a brave new world so it can't distance itself entirely from the BT
Will Harris, the vice-president of marketing of mmO2, says the heritage
issue is not as difficult as you'd think. "As long as you have something
substantial to give people, they will give you the benefit of the
doubt," he argues. "People aren't as cynical as the press - they want to
believe in new products. We can bring the BT Cellnet trust and
reliability with us and leave behind the bad things. People associate BT
Cellnet generally with mobile data services - they recognise that we're
He also points out that lessons have been learned, especially where hype
is concerned. "There will be no grandiose claims. We will always keep in
mind that there are users who will not want more than SMS for the
foreseeable future. A modern consumer brand has maybe 15 consumer
segments, all of whom want to consume it in a different way."
Many in the digital advertising market wish mmO2 well, especially in its
self-proclaimed leadership role. Neil Wooding, the head of pervasive
technologies at futureOgilvy, says it might just work. "It's always a
challenge when people decide to change brands and you can see why they
might want to ditch the BT logo. The sorts of things they want to be
doing in the future can possibly only be achieved with an entirely new
brand - a shiny new logo if you like. If this is about positioning for
services for PDA phone devices, then they are probably aiming at the
right market - integrated devices will become more important."
And Wooding reckons there's a range of BT Cellnet mistakes that O2 must
learn from. "It's important they don't confuse the brand with any
particular technology. The brand has to be able to accommodate
technologies as they emerge. It all comes down to the relationship they
are able to forge with consumers. If all they are doing is putting on a
new facade, that could lead them into fresh difficulties."
But what of Agency Republic's role here? Is it really as instrumental as
they'd have us believe? Martin Brooks, the joint managing director,
says: "In the short term we are creating a brand online and then turning
it into something that consumers can interact with."
Tim Millar, a senior planner at Agency Republic, says the internet has a
huge part to play in delivering an understanding of what wireless can
deliver to consumers. He states: "If you look at telecom companies and
their brands generally, it has been a pretty immature sector in the way
it has treated consumers. There's been massive hyperbole about products
and technologies and they have never really acknowledged or done any
appraisal of the role of these technologies in people's lives. The
approach for a new generation of mobile brands must be realistic,
insightful and precise."
And we're also talking viral here. Harris says it could make a real
difference: "Agency Republic's viral work has been excellent. Five years
ago, we didn't have half the brand contacts we have now and the
additional points of contact are personal and interactive. Anyone can do
a great TV campaign but the challenge is getting the real detail right.
Genie has an awareness figure of something like 64 per cent among 18- to
24-year-olds yet it has only spent £1.2 million in two years.
There are other ways of building awareness."
Harris concludes: "Mobile telcos haven't been the best at viral
marketing - probably because in the past they've had massive budgets and
have always thought they could spend their way out of trouble. But
that's changing - we have to do it smarter and better."