DUBLIN, Ireland-Esat Digifone has built a substantial market share since it launched Ireland’s second Global System for Mobile communications (GSM) phone service last March. Global Wireless spoke to Marketing Director Derek Handley to find out about the company’s market strategy for growth.
Ireland has a 14-percent mobile penetration (including a substantial number of analog network subscribers), which is roughly the European average, although less than half the figure for Sweden and Norway. Industry estimates suggest this figure will rise to as much as 40 percent in five years.
Esat Digifone in one year has captured one-third of the domestic market for GSM, an impressive figure that can be traced largely to its high-profile media image and positive marketing approach.
“We have positioned ourselves on quality of service, value for money and customer service rather than low prices,” explained Handley. “We didn’t invest heavily in building a network only to give it away. Our focus is on the serious mobile-phone user, who is more likely to stay with our network in the long term.”
The second cellular operator has captured a sizable share of the GSM market during the last year, and this critical mass-in excess of 100,000 subscribers to date-will drive future growth. Says Handley: “Even two years ago, mobile phones were on the borderline of social acceptability in Ireland, but that is no longer an issue.
“One of our primary ambitions now is to develop competitive tariff packages. We have reached a situation in Ireland where the quality of the service is pretty high and costs are falling. Quality of network and coverage are no longer the dominant issues, which leaves us with a commercial battle for market share.”
It is also notable that there has been hardly any evidence of negative campaigning between the two networks, aside from occasional misinformation about coverage capacity.
The cellular market in this country still offers limited tariff options, although Handley reckons that more segmented offerings for particular user groups will become the norm over the next five years.
Esat Digifone has faced considerable problems at the planning stage of its network development. “We have faced planning problems,” acknowledged Handley. “However, the national network is now in place and has advance spare capacity for six months. If I was inclined to be pessimistic, I would suggest that economics would be the only factor that could limit the development of the cellular business in Ireland.”
Such a development would be bad news for the successful bidder for Ireland’s third mobile license, due to be revealed in May. Barry Maloney, Esat Digifone chief executive, already has voiced strong objections to market entry being made easier for a third operator. The telecommunications regulator is anxious that the new players’ network development costs will be minimized.
The vast majority of people in Ireland still use their mobile phones purely for voice telephony, which is partially due to the fact that the former monopoly operator, Eircell, was slow to roll out new technologies.
“When we were putting together our bid for the second mobile license (in 1995), we got very excited about providing non-standard features because SMS (short messaging service), fax and data services were simply not available in Ireland,” said Handley. “By the time we launched last year, these features were still not available from our competitor, but our focus has always been on providing good quality voice coverage.”
Esat Digifone’s most recent development was the launch of Ireland’s first mobile VPN (virtual private network) service. “In the past, telecommunications in this country has been led by engineers who developed products which were not being demanded by customers, but this service is giving our customers something they really want. For the first time, Irish businesses will be able to unify their fixed private networks with our mobile network.”
