It’s tempting to consider MVNOs as competitors to your traditional MNO business. That view can sometimes prevail in markets that have yet to develop a flourishing MVNO market. However, experience tells us that, far from representing competition, MVNOs can actually be key strategic partners. Their ideas, agility and innovation can be an engine for MNO growth. How? Read on to find out.
How Can We Evolve our Strategies When MVNOs Enter the Landscape?
At first sight, it may seem as if a subscriber that moves to an MVNO from an MNO is a lost subscriber – but the reality is different. If you are hosting the MVNO, then any of its subscribers will continue to be on your network – and so you benefit from the network utilisation and revenue they generate.
In fact, the real threat is when a subscriber may switch to a different MNO network, or an MVNO that’s hosted on another network. Your MVNO partners are allies.
But what about new opportunities? B2B services for SMEs and SoHos, and IoT, for example are all markets that can be targeted – but an MVNO may have the agility and focus to excel here. By enabling MVNOs on your network, you can use their skills to target new segments by proxy, allowing you to focus on your own markets, while they make the investments to recruit new customers in segments that can be harder for you to reach.
In this landscape, success means keeping customers on-net – on your network – regardless of the brand to which they choose to subscribe.
The inevitable entrance of MVNOs
In truth, the question surrounding MVNOs entering a market is not “if,” but rather “when”. This can happen in one of two ways. First, the regulator may mandate that MNOs open up to MVNOs. Second, an MNO may, in some cases, independently open its network to MVNOs – and set a precedent in its market, perhaps gaining first-mover advantage.
Regardless, it’s inevitable that MVNOs will enter the market. So, as an MNO will be left with a simple choice: either embrace MVNOs – or risk losing ground against more agile competitors.
What happens when MVNOs enter the market?
When MVNOs make their entrance, several irreversible shifts occur in the market. First, things get shaken up a bit! MVNOs typically lead to a refresh in the market, encouraging users to explore alternative service providers – and potentially weaken loyalty to current providers. Next, while the overall subscriber base may not change (assuming the market is already saturated), there will be a rebalancing of subscription distribution – some (many) will migrate to the new MVNOs. So, MVNOs may grow (at a faster rate than the MNO incumbents), while the host MNO will generate new revenue. However, with IoT services, they may be an overall increase in the number of subscriptions, as new devices are connected to the serving network.
But, a final consideration is the fact that, once MVNOs have been enabled, MNOs must make the right strategic decision, or risk being left behind: embrace MVNOs or seek to compete. However, action will be inevitable.
MVNOs are your strategic allies
If we agree that MVNOs represent an opportunity, rather than a threat, new avenues can be unlocked for MNOs. In markets with mature MVNOs, some MNOs have emerged as clear market leaders from a challenger position.
How can you capitalise on the MVNO opportunity?
By becoming an enabler! This requires some basic steps – and the right platforms and systems to be in place. MVNOs are really wholesale partners, so you must be able to support robust and flexible wholesale charging and rating models, that can support different business offers and discount schemes.
You’ll also need a clear and easily repeatable process for onboarding MNVOs of different kinds. This must be complemented by access to BSS / OSS systems so that MVNOs can leverage your systems for rating, billing, customer and self-care, service management and so on.
The goal is to be able to work with MVNOs of all sizes, enabling them to enter the market swiftly and with minimal investment. The focus of MVNO investment should be on onboarding subscribers to your network, rather than on technology!
Innovation is key to the MVNO model, so your platform should also offer a sandbox for experimentation in new products – which can also be purposed for new solutions under your existing brand, all without impacting your legacy BSS platforms.
And, of course, there’s also the opportunity to launch your own MVNOs – second or fighter brands, targeted at segments outside your own core or current focus. Second brands allow you to complete for new opportunities, without undermining your existing brand – and many such fighter MVNOs have brought new agility to business operations.
In sum, MVNOs – both new partners that you host on your network and second brands – help you to monetise your investments more effectively, as you can ensure full utilisation of your network. They represent new revenue streams, with margins that boost your profitability – because they take on the costs of customer acquisition and promotion.
Conclusion
MVNOs will inevitably enter your market at some point. Yes, they can be perceived as a threat – but this is to ignore the opportunity they represent for your business. By embracing this opportunity, you can benefit from new revenue, enhanced profit, better resource utilisation and cost efficiencies they can generate – helping you to remain competitive and to discover possibilities for growth and innovation.
