Telecom's 'Skinny Mobile' to launch in new year

UPDATED Nov 14: Telecom has confirmed that Paul O’Shannessey has been recruited to head Skinny Mobile.

NBR spoke briefly to Mr O'Shannessey this morning, who said the new mobile service will launch "shortly after Christmas at a large youth event before going on to the general market."

Mr O'Shannessey said Telecom had been working on the new mobile brand for about for about seven months.

Around 20 staff have been recruited for what will be a "standalone" operation inside Telecom.

A leaked web page (pictured below) indicates a focus on the youth and budget markets.

Skinny would run on the same W-CDMA network as Telecom's XT-branded service, and share behind-the-scenes services.

Mr O'Shannessey told NBR he had been an independent consultant for several years before joining Telecom.

His work involved advising large retailers, and more recently websites, on e-tail initiatives. A recent project involved working with YahooXtra on the ultimately ill-fated Hubsta online shopping service, dubbed "Son of Ferrit" by NBR. Hubsta - 48% owned by Mr O'Shannessey and his partner Kelly O'Shannessey - went into receivership in November last year owing $5.6 million.

Skinny would not go with a traditional agency. Instead it would "youth source" much of its marketing.

"You can't market to youth," Mr O'Shannessey said. "Youth sourcing" involved talking to young people, and creating plans that directly reflecting what they wanted, the Skinny boss said. Skinny being layered on top of XT allowed the new player to be "very agile," he said. 

Asked about the $4 offer that featured on the leaked web page, Mr O'Shannessey said "there's lots of dummy pricing and plans" on the pre-launch site still under construction.

Friday Nov 11: Is Telecom preparing to launch its long-rumoured sub-brand, aimed at budget buyers?

This afternoon, one of the telco's competitors tipped off NBR to the page pictured above (which, as your correspondent types, is still public here; UPDATE: the page now displays a "Client address is not authorised" message). 

The contents of the page indicate a new budget mobile phone service is in the works, called Skinny.

Click to enlarge.

The domain name for Skinny has been registered by Telecom's lawyer for IP issues, AJ Park (last seen in a similar context a couple of years back registering "XT").

An Intellectual Property Office NZ search reveals Telecom has registered the trade marks "Skinny" and "Skinny Mobile".

Defensive move against 2degrees ....
Industry scuttlebutt has long held that the carrier will launch an a sub-brand aimed at the pre-pay users who have been defecting from Telecom and Vodafone to 2degrees. An earlier stab at a low-cost sub-brand, Boost Mobile, was wound down in 2007.

Telecom has previously said it wants to capture more share of the Auckland market. IDC research director Rosalie Nelson told NBR that Skinny could help reel in Vodafone's lead in the Auckland/youth market.

The Skinny page indicates a $4 pay weekly deal - the kind of ultra-budget package Telecom would not want to market under the umbrella of its "smartphone" XT network.

A trendy, distressed look indicates the site, and the service, is aimed at the youth market.

... and offensive play to speed shift from CDMA
A second key reason for Telecom to launch a budget sub-brand: In August, the company said just over a million of its two million or so total mobile customers were on XT.

XT (which runs on a 3G technology called W-CDMA),  launched more than two years ago.

Telecom's old CDMA network is due to be switched off on June 30 next year.

With that 2012 deadline fast approaching, Telecom needs to pick up the pace of customers moving to XT. The iPhone 4S will help at the high-end.

But to get a lot of subscribers to move off CDMA in a hurry, a "Skinny" version of Telecom's W-CDMA network could be the key. 

Telecom did not immediately respond to a request for comment.

The company's shares [NZX:TEL] were flat at $2.69 in late trading, sticking close to their 24-month high.