Inside Story: Upwardly mobile

About 80 per cent of the population of Britain has a mobile phone. In 2004, the market was worth £1.1bn, an 11 per cent rise on 2003, according to Mintel. This growth has led to a change in strategy on the part of the major network operators. The emphasis has shifted from brand-building to encouraging customers to spend more on their phones. Richard Gillis reports

15,226,000 UK users; 25 per cent market share (figures include Virgin Mobile)

T-Mobile, owned by Deutsche Telekom, saw revenues drop by 8.6 per cent year-on-year to €1bn (about £680m) in the first half of this year. The company has just three million contract customers in the UK, compared with almost 13 million pre-pay users.

Its strategy is to offer network capacity as a wholesaler, and as such it is the power behind easyMobile - owned by easyGroup - a no-frills, SIM card-only service launched in March this year.

MARKETING ACTIVITIES

Robbie Williams

An innovative new deal sees singles from Williams' new album available to subscribers at £1.50 a pop, before they reach the shops. This is one of many attempts to persuade the iPod generation to download music via the phone. Other plans include live streaming from concerts, full-track downloads and promotions such as tickets, hospitality, backstage tours and after-show parties.

Fifa World Cup 2006

This is driven by the German head office, keen to make the most of an event in its back yard. The selling point of sponsoring a major global event is that the high cost - about £25m - can be spread across each major market. However, it will be hard to build an association with the sport when the T-Mobile brand is one of 15 commercial partners clustered around the World Cup.

The Premiership: Aston Villa, Birmingham City, Charlton Athletic, West Bromwich Albion

Agreements with clubs are based on a revenue-share basis, with the clubs receiving a commission payment for content and services, while the operators are handed numerous branding opportunities within the clubs' stadiums, fanzines and websites.

Cycling

The T-Mobile Team has been a resounding success encouraging the extension of its sponsorship up to 2008.

VODAFONE

15,200,000 UK users; 25 per cent market share

Vodafone is the biggest mobile communications company in the world, with 152 million customers. It is dominant in the contract market, but its UK market share in this sector fell by two points from 2002 to 39 per cent in 2004, according to Ofcom. However, the key measure - average revenue per user (ARPU) - was £574 in 2004, a 6 per cent increase on the previous 12 months.

The network introduced its 3G service for Christmas 2004, with its Live! content service. It has signed up 190,000 3G users in the UK (its worldwide total is 2.4 million, and it has a global target of 10 million by March 2006.

MARKETING ACTIVITIES

The Premiership: Manchester United

Vodafone shareholders were picketed by fans pressing the company to end its £36m sponsorship of United following the club's takeover in May by the US billionaire Malcolm Glazer. The Vodafone chairman Ian MacLaurin told shareholders the company would review the agreement in due time. "The number of cancellations we have had in relation to our sponsorship of Manchester United has been very small indeed,'' said head marketer Peter Bamford.

Ferrari Formula One

Before entering this three-year £110m deal, Vodafone allegedly first courted the Jordan team. Eddie Jordan, then the team owner, took Vodafone to court on the basis of being told that he'd "got the deal" by a senior Vodafone executive. He lost, partly on the basis that Vodafone's strategy was based on "owning the colour red" in the mobile market. Jordan's cars were yellow.

England cricket team

Vodafone benefited from record Channel 4 viewing figures in the most exciting Ashes series ever this summer. However, a new £4m-a-year deal signed this summer shows the value of content over brand exposure. Test cricket goes off terrestrial TV from the end of the summer, with all live games moving from Channel 4 to Sky.

The Derby

This summer's Derby was carried live on Vodafone's network, the first live streaming of a major sports event in the UK. More will follow, testing the value of sports content as a driver of sales.

ORANGE

14,200,000 UK users; 23 per cent market share

Orange, owned by France Telecom, has an estimated 52 million users in 16 countries. Sales at Orange UK slipped 3.2 per cent to €2.81bn (about £1.9bn), and ARPU fell by 2.6 per cent to £267.

MARKETING ACTIVITIES

Bafta

Film offers a point of difference in a market dominated by sport and music. The link with the British Academy of Film and Television Arts is supported by some well-executed cinema ads that play to common preconceptions about marketing folk. Orange Wednesday offers cheap cinema tickets bought over the phone, an early example of m-ticketing.

The Premiership: Chelsea, Blackburn Rovers, Bolton Wanderers, Liverpool, Manchester City

This is part of a series of secondary sponsorships with Premiership teams, supplying data and picture content through the Orange World portal. Some rights issues will need to be resolved between mobile telecoms and TV broadcasters when video archive and live action comes on stream.

Frank Lampard

Orange has signed up the Chelsea and England star to do for it what David Beckham did for Vodafone. Subscribers will be treated to video diaries documenting the life of the super-rich stars of west London.

Orange TV

Demand for mobile services is currently driven by photo-swapping and text-based services. There are advanced plans that will strengthen the link between TV broadcasters as more handsets are able to take video-rich content.

Glastonbury Festival

The mobile telecoms groups, along with beer brands, have done most to break down music fans' natural cynicism about what they regard as the intrusion of big business. Other brands have blundered by throwing money at the sector, only to be viewed as crass opportunists.

Orange Prize for Fiction

The award scheme originally attracted comment about the place of gender-specific prizes in the arts. However, with £30,000 going to the winning female author, its place in the annual literary award season is assured.

The Orange AIM (artificial indoor mountain) series

This is a competitive circuit for snowboarding and freestyle skiing, which ties in with the network's snow-sport information service. Much of the growth in mobile use is attributed to the youth market, which also accounts for a large proportion of the 2.5 billion text messages sent in the UK every month.

O2

14,200,000 UK users; 23 per cent market share

Previously known as BT Cellnet, O2 has reportedly been lined up for a £14bn takeover by T-Mobile's parent company, Deutsche Telekom. O2 launched its 3G service this year, and is also the network behind the Tesco-branded mobile service launched in 2003, which has more than 500,000 subscribers.

The company announced 400 redundancies due to restructuring, a sign of the change in emphasis away from attracting new customers and looking after the ones they have. This coincided with fat-cat headlines as senior management enjoyed £14m of share options.

MARKETING ACTIVITIES

England rugby union team

O2 chalked up huge marketing capital from its £5m-a-year association with Sir Clive Woodward's 2003 World Cup winning heroes, despite Prince Harry's refusal to swap his old BT Cellnet shirt when attending the games. O2 is tendering for the UK rights to the 2007 Rugby World Cup in France.

The Premiership: Arsenal

Apart from the branding benefits, football allows O2 to provide video content in the form of highlights and goals, which will be rolled out gradually over this season. Vodafone and 3 (a 3G-only network) have already secured the 3G rights to immediate post-match Premiership highlights, but there will be opportunities for other operators to provide delayed highlights.

The O2

From next year, the Millennium Dome in London will be called The O2 in a £6m naming-rights deal aimed at transforming the greatest white elephant in British architectural history into a 23,000-seat music venue. At the very least, it might get the brand into the credits of EastEnders.

NME Rock'n'Roll Riot tour

Mercury Music Prize-nominated Kaiser Chiefs hit five university towns to supplement this summer's festival season. The brand also sponsored the Wireless Festival in Hyde Park, London in May and June.