Differentiation in telecoms isn’t always about speed

Last week I was at Product at Heart in Hamburg, talking with a group of telecoms product managers. It was the hottest day of the year, but the heat wasn’t what they were sweating over.

Their worry: the sheer cost of 5G and fibre, and how hard it is to stand apart once the network is built. Pour in the investment, light up the coverage, and customers still treat you as a commodity. When that happens, you compete on one axis only — price. And price is a race nobody wins.

So how do you grow on any axis other than price?

One answer caught my eye this week. Virgin Media O2 has been talking about its Priority programme not as a loyalty scheme, but as a reason to stay. As Lisa Johnstone, their Director of Priority, Loyalty & Rewards, puts it: loyalty isn’t a scheme, it’s how they prove they’re worth staying with.

A few takeaways worth chewing on:

• Experiences beat discounts. Gig tickets, rugby matches and family days out are what customers remember years later. A points balance is not.
• Discounts are a trap. If loyalty lives only in perks and price, the moment a rival offers a bigger cut, you lose. It becomes a tax on the business, not a differentiator.
• Measure the relationship, not the transaction. Virgin Media O2 reframes the question around “Household Lifetime Value” — loyalty plays out over years, not weeks.

The point for product people: differentiation doesn’t have to come from the network. It can come from the relationship you build on top of it. Speed and bundles are table stakes. Relevance to someone’s life is harder to copy.

That’s the thread I want to pull through this series — the different ways telecoms can build value that price can’t undercut.

So here’s my question to you: where have you seen genuinely good differentiation in telecoms? What made it stick? Drop your examples below — I’ll feature the best ones as the series goes on.

Read the Virgin Media O2 piece here.

Eddie Pratt is Managing Director of Product Focus.

P.S. If you’re looking for ideas on differentiating and creating value propositions, explore our Product Management Journal – Propositions.