It may feel as if it's been an age coming - after all it's almost 20 years since the domestic telecoms market was opened up - but at last it would appear BT is to face some serious competition. There was a brief flutter of activity courtesy of Mercury and its blue button in the 90s and more recently the cable operators have dug into BT's territory a little. But it still enjoys a 73% market share and has 20 million customers.
But now the battle can truly commence, because customers can opt for an alternative service to BT's - without having to change phone lines or go through the hassle of prefixing all the numbers dialled with extra digits.
And what better way to signal the start of the battle than via the tabloids.
In deals reminiscent of Pepsi turning The Mirror blue - although that's probably where they'll want the comparison to stop - BT lined up with The Sun while the Daily Mirror did a swift bit of negotiation with Carphone Warehouse.
The result was the Daily Mirror selling for 20p and the whole of page three turned over to Carphone Warehouse's entry into the residential telecoms market, while The Sun's price dropped to 24p with page ten dedicated to BT and a further six ads running throughout the paper. So Carphone Warehouse won the first round of undercutting.
One thing's for sure: while the marketing of the fixed-line operators may be hotting up, activity remains focused on price. Since the advent of mobile phones, consumers have become used to, and exasperated by, the price packages offered by the various operators. It would seem the world of confusion marketing is about to become a fixed-line reality.
BT has had to learn a lot of painful lessons in marketing in a competitive industry since privatisation in 1984, but it has a crucial weapon in its armoury: big budgets. With £20m assigned to advertising its BT Together package alone, new entrants will have to be particularly effective to rise above that level of exposure.
But even £20m may quickly seem remarkably little against this line-up of retail competitors. Unlike the cable companies, Carphone Warehouse, Sainsbury's and Tesco all have very strong brand credentials and, on top of that, they know a thing or two about competing on price.
Analysis, page 19.
_1.jpg)
.jpg)