On 23rd May 2022 Orange Belgium announced a set of new features for its youth orientated hey! tariffs and brand which is targeted at subscribers aged younger than 26 years old. In addition to a competitive tariff rate for the price sensitive youth segment, Orange Belgium is promoting hey! as a low carbon tariff because all interactions between customers and Orange will occur over digital channels (e.g. paperless transactions). Orange Belgium claims SIM cards issued to hey! subscribers are developed from recycled materials and with a minimum carbon footprint in mind. Orange has done the same with its Orange Flex tariff in Poland. It is not clear if hey! tariffs are also enabled for smartphones supporting eSIM, thus eliminating the need for a physical SIM card and the process involved with shipping it.
Strategy Analytics’ Take
Positioning hey! as an eco-friendly, digital only tariff is a smart move by Orange and is aligned to the growing demand for green alternatives from customers and stakeholders. Orange is already doing this in Poland with its Orange Flex tariff where it also claims 100% of the energy used to power Flex services comes from renewable sources like wind farms in Wielkopolska.
A recent survey by Strategy Analytics identified that 80% of respondents agreed to some degree that they tried to buy from brands that are focused on sustainable business practices, and 75% would be willing to spend more to buy environmentally friendly products and services.
Exhibit 1: Consumer Attitudes Towards Environmentally Focused Products & Services
The impetus to turn green is not only coming from consumers. CSPs are increasingly measured by investors and B2B customers on their ability to show progress towards meeting corporate Environmental, Sustainability and Governance (ESG) goals and objectives. Therefore, ESG is already a key part of telco strategy. The creation of digital only, low carbon, eco-friendly tariffs and features provides Orange with a good example of its efforts to showcase to its shareholders and customers.
It’s worth noting that Orange is not the only service provider promoting digital only tariffs and low-carbon offers. For example:
- April 2022: Hutchison Drei Austria launched digital only brand up3 to enable users to engage exclusively with subscribers through its app. It is designed for eSIM smartphones, meaning only an app is needed to sign up.
- June 2018: UK energy provider, Ecotricity, launched an MVNO called ecotalk which promises to use profits from its telecoms service to purchase land for nature.
Strategy Analytics applauds Orange’s eco-friendly approach in Belgium and Poland. Orange's green tariffs will likely resonate with segments of consumers that have greater awareness of environmental issues and that are actively seeking green products and services. While a digital only offer is not impossible to replicate in the long term, as a first mover Orange’s brand will benefit from a halo effect. Many other CSPs are also targeting net-zero and will move in the same direction. Other potential eco-friendly options and features should also be considered by CSPs:
- Charitable donations to environmentally friendly campaigns
- Co-marketing with organisations recognised for sustainability
- Promoting device recycling programs offered by Orange and refurbished device schemes
- Gamifying/ rewarding users for eco-friendly behaviour
- Orange Poland Flex enables users to exchange unused data in their plans for tree planting (30GB = 1m2). The status of forest growth can be viewed via the Flex app so users can see the impact of their efforts.
- Eco friendly product and packaging certification with recognised bodies e.g. FSC
One of the key features and USPs of hey! is that user focus groups can dictate how the product evolves. However, while focus groups are useful at understanding sentiment and broad trends, they are not as accurate at predicting buying decisions.
As a leader in discrete choice analysis and consumer behaviour research, Strategy Analytics can help companies model real decision-making behaviours by consumers through shopping exercises to better understand the impact of different environmentally friendly messages on actual user behaviour. Click here to find out more: https://www.strategyanalytics.com/business-solutions/understand-your-customer/