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First, who is Oi? Oi is the 4th largest operator in Brazil. They have a quasi-nationwide coverage and about 13 million subscribers, which is about half the subscribers the three big Brazilian operators have – Vivo (Telefónica Spain) with 29M, TIM (Telecom Italia) with 25M and Claro (América Movil) with 24M.

Tough their are not Brazil’s largest player in mobile, they attract a lot of attention because they are part of the Telemar group, the largest fixed-line and broadband incumbent in Brazil. They take advantage of that unique position and try to be the first to launch convergent products in the market, with varying degrees of success. What they successfully have managed to do, though, is to position themselves as a forward-thinking operator that takes risks their competitors are not willing to take.

Late last year Oi started keeping the smallest phone inventory possible and shifted most of the responsibility for purchasing and selling phones to their retail partners. Their view was that the whole market was soon going to change to this model, the heavy subsidizing of devices was hurting their bottom line and creating long-term customer care problems and the current model just didn’t work for the small guy with lower volumes. So they decided to cut their direct purchases, work with the retail channel and keep subsides to a minimum.

As a initial result, since their phones weren’t subsidized or marketed directly (as Oi started to focus their marketing increasingly on their services), they were being sold as unlocked phones.

Changing the rules

Now if all your competitors have some sort of lock-in over their customers and you have just found out you can’t afford to do that, what do you do?

They did the smartest thing – turning that “weakness” to their advantage, by marketing their unlocked phones as the choice for the freedom-oriented consumer. The commercial below is in Portuguese but quite easy to follow – the consumer tries to get a phone for himself at a store but ends up getting handcuffed to the operator.

The signature says “We want you to stay at Oi because you like it, not because you can’t leave. Freedom like this, only at Oi.” Their homepage also says “You are our client, not our hostage”.

They also launched a viral campaign called Bloqueio Não (roughly “Say no to lock”)

Very interesting move from an operator. Let’s see where that leads.