MTS is changing its own positioning in the market and plans to remove the corporate egg from its logo, a company employee told Vedomosti and four interlocutors in MTS partner and competitor companies confirmed. “MTS will abandon the egg in the logo, continuing to move away from the name “operator” in favor of the “ecosystem,” one of them explained. A spokesman for MTS declined to comment.
According to the interlocutors of Vedomosti, the company may announce a change in positioning already at the conference on March 30, 2023. As noted in the announcement of the event, MTS President Vyacheslav Nikolaev and a number of vice presidents of the company will take part in it, it is also planned to present an “updated ecosystem strategy” operator.
Why did MTS postpone rebranding
A Vedomosti source in MTS claims that the company was preparing to change the logo back in September 2022, but then these plans had to be “paused”, since partial mobilization was announced in the country on September 21. This information was confirmed to Vedomosti in March 2023 by two interlocutors in competing operators. But in September 2022, an official representative of MTS denied to Vedomosti information about plans to make any changes to the logo and positioning of the company. He emphasized that the operator also did not order the development of any projects from branding agencies.
But a division of the BBDO agency took part in updating the branding strategy, Vedomosti sources said in September 2022. Vedomosti then also got acquainted with the presentation signed by BBDO. As follows from her slides, she was also presented in September. One of her slides was titled “MTS Rebranding”. The BBDO representative then did not answer the question about the presentation, and in March 2023 he forwarded the questions to MTS.
According to another interlocutor at MTS, when changing the logo, the company decided not to change the slogan, it will remain “To be better every day” (valid since 2019). The cost of rebranding will be “several tens of millions of rubles,” he says. This amount is explained by the fact that the company does not plan to increase the financing of advertising promotion, and signs are supposed to be changed gradually. First of all, two central MTS stores in Moscow will undergo rebranding – on the street. Tverskaya and Arbat.
The company has been discussing rebranding for the past couple of years, but postponed for external and internal reasons, says one of the interlocutors close to the operator (see inset on page 6).
MTS carried out the last large-scale rebranding in 2006, when it switched from a combination of letters on a yellow background to a white egg on a red one. Similar logos with eggs, but in different background colors, were also received by most of the MTS subsidiaries. In the future, the company carried out only “cosmetic” changes to its logo. For example, in 2010 volume was added to the egg, and in 2019 the operator switched to a red egg on a white background.
MTS already in 2019 emphasized that it considers itself not just a telecom operator, but an umbrella brand that combines various services: fintech products based on its own bank, services for buying tickets for cultural events, smart home technologies, multi-platform TV, telemedicine services, etc. Then BBDO Branding was involved in the development of the company’s positioning.
The rebranding of MTS now looks quite logical, Denis Kuskov, the founder of Telecom Daily information agency, believes. “It’s been quite a while since the last logo came out, when the company moved to positioning with the signature egg in 2006,” he says.
According to him, since then the situation on the market has changed dramatically: telecom operators have ceased to provide only telecom services, entering a large number of related segments. “Thus, a new promotion option is now required, and the brand will play an important role in this,” the expert continued.
In addition, now the telecom services market is growing at an average of 2-2.5% per year, notes Kuskov. “This is a certain stagnation. And operators can achieve a much greater effect by launching new services close to telecom. Therefore, despite all the difficulties of the current time, it would be less logical, in my opinion, to delay the rebranding,” the expert concluded.
By itself, the development of a new brand can cost MTS about 40-50 million rubles, its implementation will be more expensive – 150-200 million rubles, this is a change in the design of offices, sales outlets, etc., estimates the managing partner of the branding agency Depot Alexey Andreev. Also, according to the expert, about 1 billion rubles. may cost a large-scale advertising campaign, including several cycles worth 300-500 million rubles. every. In total, it takes about a year or a year and a half for a company like MTS to switch to a new brand, he adds.
In 2022, MTS net profit decreased by 48.7% to 32.6 billion rubles, the company reported. MTS revenue amounted to 541.7 billion rubles. against 521 billion a year earlier. The decline in profits was due to foreign exchange differences, higher operator costs, and the tax schedule. In 2022, the MTS mobile subscriber base in Russia decreased by 400,000 people to 80 million.
Over the past two years, several large companies have been rebranding on the Russian market: Mail.Ru Group changed its name to VK, Sberbank became Sber, and Beeline became Beeline. Since the spring of 2022, many foreign brands have stopped working in Russia, while their Russian offices have been rebranded and continue to operate under other names.
“This artificially created situation of rebranding made the existing Russian top brands think that they have the risk of unexpectedly remaining old. Therefore, a trend has formed on the market that global Russian brands are thinking about updates, ”Andreev explained to Vedomosti. The appearance of shops, restaurants and other public places is changing. At the same time, a buyer in retail chains, a restaurant visitor and a user of communication services are one and the same person, which is why the operator strives to be on the same wavelength with most major brands, the expert argues.
In Russia, the ecosystem market has been in a state of exponential growth in recent years, Vitaly Mikhalchuk, head of the research center at DRT (formerly Deloitte in Russia), draws attention. Nevertheless, the development priorities of ecosystem market participants have changed from scaling up due to reaching a larger number of users, increasing the turnover of goods and services in favor of bringing individual services to profitability and profit growth. “Investments in scaling ecosystems on the previous scale are impossible, and there is nothing to support deeply unprofitable assets, so ecosystems will get rid of non-core assets or those where they decided to experiment, but did not succeed,” the expert concludes.
