The role of branding and marketing in telecoms has increased in importance. Branding is essential if a product or service is to succeed.

The use of sub-brands is not new. They have been used by a number of businesses, including operators, for a long time. Korean MNOs, for example, have used sub-brands since 1999. Traditionally though, markets leaders have been focused on establishing strong parent brands. The non-dominant MNOs have been the first to use sub-brands as a way to reach new segments. But this is changing, according to the Ovum report. Many market leaders, especially those in mature markets, are now considering using sub-brands.

The Ovum report states that an established sub-brand can appeal to selected groups much like a parent brand does to the mass market. If implemented effectively, sub-branding can be a powerful tool as it allows MNOs to target new segments while protecting the parent brand, and also fill any gaps in their product portfolios. It can also make it possible for MNOs to increase competition in particular segments.

The report also states that the future success of sub-branding depends on finding new markets to target. A few examples are listed in the report, including discount (low-cost), older customers, kids, ethnics, sports, TV content, business and so on. Along with the discount segment, one that can be beneficial to end users is the idea of innovative tariffs. Sub-brands can also offer end users a whole new range of options when choosing an operator.

The potential of each segment, from the MNO perspective, will depend on the particular market. Potential segment size, revenues, ARPUs, margins and so on are factors used to address the value of a segment. MNOs must, however, be cautious when using sub-brands, especially one that has been successful in another market. Tailoring the sub-brand can be key to success.