“…dusk is the time when men whisper of
matters about which they remain silent…” – Simon Raven
It started out as a mere whisper within the
four corners of the board room after our wireless consumer head Ariel Fermin
took over from Charles Lim in May. A few months later, the whisper about Sun
Cellular being dissolved is now slowly echoing within every floor of Smart
Tower.
But is there even a tinge of truth to this
latest rumor? Let us check the signs.
The Lost Revenue
When we bought Sun Cellular for P69.2
billion in 2011, the big idea was the total dominance of the industry with a
combined 67% market share in revenue terms.
Ironically, revenue market share is the one being used by our competitor
as the new metric of leadership instead of subscriber base which we use.
However, the story today is different. In a two player market and in terms of
revenue share, Smart and Sun Cellular have a combined share of 53.4% which
13.6% less revenue from the 67% in 2011. We still lead but the 13.6% we lost in
the past years amounts to billions of pesos.
(Note: Dun dapat kukunin bonus natin)
In terms on a per brand basis, Globe leads
in the revenue share and so they claimed with 34.5% followed by Smart with
26.7% then by Talk&Text with 15.6%, TM with 12.2% and lastly, Sun Cellular
with 11.1%. By dissolving the Sun Cellular business into the Smart’s, we can
regain the revenue market leadership at 37.8% cornering the top spot in both
two player and multi-brand market and save face. To become the undisputed
leader again, we must dominate both revenue and subscriber base just like
before.
Tainted Brand Reputation
Another sign is the “Sun Cellular
advertising campaign gone wrong” of Sun postpaid boss Joel Lumanlan. The brand reputation of Sun is now taking a
massive beating after the so-called nitpicking creative insertion in the
campaign spilled-over in the media as seen here: 1) Manila Bulletin “Globe
lodges complaint vs Sun” http://www.mb.com.ph/globe-lodges-complaint-against-sun-ad/
and 2) Biz Buzz “Telco Ad War”
http://business.inquirer.net/200369/biz-buzz-zambales-mining-mess . (Note: We
love PDI’s Biz Buzz, they carried our story before about Charles Lim, only to
remove it after hehehe)
Someone from the Sun postpaid team also
informed us that Ad Standard Council (ASC) which is the body that approves all
commercials ordered them to take out all ad materials with the brand refresh
tag “Choose Better”. Producing ad
materials is not cheap and it cost millions. (Note: Yes, Joel Lumanlan threw
away millions of A&P monies away. Again, bonus na lang sana natin yun). The
same source also disclosed that Fermin knew and approved all the materials in
the advertising campaign.
This same dirty marketing tactics were used
by former wireless consumer business head Noel Lorenzana during the launch of
the Live More campaign and we all know what happened to him. The Live More campaign shall always be
remembered as the onset of the company’s downfall in which we have yet to
obviously recover. I think Fermin is
not stupid to follow the footsteps of Lorenzana and moreover suffer the same
fate. So the intent is clear as
daylight, the tainted reputation of Sun Cellular becomes now the one of the
main reasons to integrate it with the mother wireless brand and instantly gain
the leadership in the revenue market share.
The Telstra Scare
The entry of Telstra and San Miguel shook
the entire industry with anticipation.
Telstra would provide Ramon Ang with the added financial resources and
technical expertise. We all know the bad
blood between Ang and our chairman. For MVP, this is a bit personal and would
be beaten by Ernest Cu in than by Ang in the industry that he nurtured.
Also, many former Smart employees, those
who suddenly became redundant, have been hired by San Miguel so they have
knowledge about the local market. Since
there is no job security here since the late 2013, many are hoping to jump ship
to San Miguel which is very aggressive in pirating telco people.
Another source told us that our bosses are
now scrambling to improve the performance of the wireless business because the
2nd player which is us is always the one that gets affected when a new player
comes in.
The pressure is quickly mounting on the
back of Fermin and the entry of Telstra and San Miguel is another boulder that
he is carrying on his back. We believe that the brand integration of Sun into
Smart is the most logical and immediate step to create a perception that we are
still the leader in this business be it in prepaid and postpaid.
How will James Go react? We think someone
have already whispered this impending folding of Sun Cellular to him since the
Q3 performance results are already known.
***
On a different note, we are proud to announce
that this blog is now averaging 27,000 page views per month.
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