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Wheldon on the way out at Vodafone?

February 9, 2010

All change in the world of chief marketing officers, it seems. Another CMO-type who appears to be heading for the exit is David Wheldon, global brand director at Vodafone.

Certainly, the headhunters have been alerted.  Cause of imminent departure? It would be guesswork, but guesswork along the same lines as Simon Clift’s situation at Unilever. New brooms do like to sweep clean.

In Wheldon’s case, the new boss is Wendy Becker, group chief marketing office and a member of the Vodafone executive committee. Becker joined last September from TalkTalk – a subsidiary of Charles Dunstone’s Carphone Warehouse – where she was managing director.

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Ofcom ‘double standards’ in BT pension investigation

December 4, 2009

If I were Jeremy Darroch, chief executive of BSkyB, I would be incandescent at Ofcom giving BT a sympathetic hearing over its proposal to cane consumers with extra broadband charges so it can stuff its depleted pension fund.

Here’s why.  Ofcom appears to be operating a set of dual standards when it comes to regulatory investigation. On the one hand, it is perfectly prepared to consider lowering the wholesale prices that BSkyB charges its rivals for pay-TV programme rights. Principal beneficiaries? Virgin Media, Top Up TV and, er, BT Vision.

On the other hand, it is equally prepared to consider raising wholesale prices when such an action would benefit BT. As for example, with the line rental charged by BT wholesale subsidiary Openreach to third party broadband customers, such as TalkTalk  – and BSkyB. Ofcom says it wants to benefit the end-user of pay-TV by lowering prices; yet contradictorily it implies end-users generally may have to carry the passed-on burden of raised broadband tariff prices should BT’s pension stuffing be deemed ‘in the public interest’.

There’s more. The ostensible reason for an investigation into the pay-TV market is that BSkyB operates a complex monopoly, which may need to be moderated by introducing an independent pricing structure monitored by Ofcom. Wait a minute, though. Doesn’t BT also operate a complex monopoly – in the supply of broadband (copper-wire-based) infrastructure? And isn’t Ofcom opening itself to the charge of propping up that monopoly if it let’s BT’s proposal through?

The crux of the BT rationale is that it provides a vital public service, at a loss. In other words, it has had to run a pension deficit as a result of conditions (the regulatory framework; the rising longevity of its employees etc) beyond its reasonable control.

Yet it is far from evident that these are the only, or even the major, preconditions which have led to BT’s pension deficit. After all, isn’t this the same BT that for some years declined to pay money into its pension fund, to the more or less exclusive benefit of shareholders? And which wilfully embarked on a high-risk global expansion strategy that eventually boomeranged on all its stakeholders disastrously?

Ofcom, which has no doubt employed entirely objective criteria in investigating these separate yet related issues, nonetheless risks accusations of conflict of interest if it finds in favour of BT. All the more so because it has now become a football in the increasingly acrimonious war between HMG and Rupert Murdoch. If the NewsCorp-backed Tories get in next year, Ofcom will most likely find itself history.


Falling out of Phorm

July 9, 2009

BadgerPoor old “Badger” Lamont. The former chancellor of the exchequer must be ruing the day he lent his name to controversial behavioural targeting company Phorm as a non-executive director.

Earlier this week, Phorm brushed off its rupture with British Telecom (only the UK’s leading internet service provider, after all) as nothing more than a hiccup in a global expansion strategy that also involves, er, Korea. Now the number 2 ISP, TalkTalk, has also dissociated itself from Phorm’s proprietary Webwise service. Which leaves Virgin Media as its only prospective customer in the UK. Except that Virgin has neither tested Webwise, nor entered into any exclusive arrangement with Phorm. Which doesn’t, on the face of it, leave the company with many sizeable alternatives in the UK.

BT – targeted advertising that is – holds great promise for the advertising community. The possibility of giving the lie, once and for all, to Leverhulme’s adage about wasted ad budgets is one evident attraction. But there is also subtler potential in the way that the generic version, practised by Phorm, works. Because ISPs harvest the behavioural data, they would be able to charge advertisers for the privilege. It was hoped that part of this extra revenue stream might in some way – perhaps through government levy – be channelled into the reconstruction of our ageing broadband infrastructure. That at least was the aspiration voiced earlier this year by head of Ofcom Ed Richards.

Unfortunately for advertisers, Phorm’s notoriety as an alleged agent of “snoop culture” has preceded the widespread adoption of generic BT, placing a hand on its windpipe at birth.

The generic version – enshrined in Webwise – is, of course, not the only type of BT in use. Big portals, such as Google, Yahoo! and Amazon, all have their proprietary version of what is sometimes euphemistically referred to as “interest-based advertising”, derived from tracking the behaviour of their customers via cookies. To what extent these may be regarded as an invasion of privacy, as opposed to satisfying the customer’s needs, is a matter of debate.


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