Q&A with Jignesh Dave, Founder and CEO at Next360

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Christopher Lycett, Portfolio Manager for MVNOs World Congress sat down with Jignesh Dave, Founder and CEO at Next360 to discuss roam free connectivity, African MVNO opportunity and digital banking.

MVNOs: What are some of the key opportunities and challenges for MVNOs in Africa?

Jignesh: The main opportunities lie in:

  • Emerging markets with low smart phone penetration could be an interesting proposition by focusing on reach and penetration, that could yield desired results
  • In a demography where the majority of people have predetermined X amount per day to spend on telecommunications, an MVNO which can piggyback off existing businesses like microfinance, last mile retail and education is an interesting avenue
  • Africa can be a suitable market for MVNOs who are willing to step away from traditional airtime and data reselling

Jignesh: As for the challenges:

  • Razor thin margins with monopolistic market driven by MNOs
  • There is a lack of regulatory framework, unlike the matured markets where MVNOs is a way to prevent monopoly and increase competition
  • Distribution to make services at arm’s reach
  • South African example – forcing users to rely on payment methods like credit cards or contracts in a completely prepaid market with little access to banking. This is brands as big as Virgin struggled to make a mark

MVNOs: MNOs and Banks are launching MVNOs with FinTech – How important is this to MVNO proposition in Africa?

Jignesh: Giant banks like FNB & Standard Bank in South Africa getting the feel of connectivity market with a main goal of retaining clients & offer a value add is slowly but surely making a mark in the industry. Execution and operational optimization being the key ingredient, this could become a very solid ingredient for Africa as a continent.

MVNOs: You are set to speak at MVNOs World Congress 2020 in Berlin in September. What excites you most about the event?

Jignesh: I’m very much looking forward to speaking at MVNOs World Congress and meeting global industry leaders, which could be very useful in terms of experience sharing and collaboration.

This is always a great event to attend, particularly for interacting with MVNOs community which provides a level platform for peers, partners and of course competitors to engage and steer the industry forward. It also gives me an opportunity to keep me up to date with industry updates and “what next” in terms of offerings.

This year I intend to participate with one specific goal – to have an MNO partner especially in the Australian market as that is another important destination to be added as an offering to the global traveller.

In exciting news, Jignesh will be speaking at MVNOs World Congress 2020 in September in Berlin. Find out more about the event here.

Q&A with Algis Akstinas of dotmobile

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Algis Akstinas, CEO and Founder at dotmobile, sat down with the MVNOs Series to discuss digitalization in the MVNO space.

MVNOS: Is a 100% digital MVNO the answer to the growing competition between operators and digital apps?

Akstinas: I don’t think telecoms ever stood a chance to compete against the over the top communication OTT apps. They aren’t beating telecoms by chance. User experience and differentiated business models are the reasons why they are winning over users from traditional telco services. All of it is enabled by better service technology running on the existing physical networks, delivering new ways to communicate and breaking down traditional barriers to entry. They simply did it better over the internet, and they did it globally. Facetime wasn’t invented by a telecom company, and companies like WhatsApp, Skype, Zoom didn’t need the help of telecoms to grow their market share.

Today, many telecoms face competitors with better technology and a better business model (the cost to experience ratio). If that wasn’t apparent before, the current global crisis unearthed and accelerated the need for efficiency, for better digital experiences and online tools. The main threat for telecoms now is being too slow.

A well designed, fully digital MVNO can deliver better value and experience. It is also a way to provide a more accessible, efficient, and flexible wireless service. They will do it by operating their network as a service layer on top of the physical radio access network, ideally with their own, modern core network. Most of it will be in the cloud (for scalability, speed and innovation).

Now it is probably a good time for telecoms to forget the `old fight` against OTT that was lost long time ago and focus on the new one – the transformative impact the current global developments are having on the overall telecom service business (which is different from the physical network infrastructure management and investments).

What behaviours and actions traditional MVNOs must do to survive and stay relevant in the long run?

For a long time, traditional MVNOs relied on corners of the market that were analogous in nature. Top-up cards. Cash. People now expect better digital experiences, because they are used to it in other services. The pressure for better digital experiences will increase to anyone in the market.

The first step is investing digital resources in more than online ads – for example, develop better content marketing and build engaging connections with your community. Understand how to be visible on rate price comparison sites like whistleout.com and planhub.ca (just in Canada). Go beyond self-service portals and sell more online. Payment options, if a barrier at all, are verifiably solvable (mPesa mobile money, WeChat p2p and other services).

New ways to operate are emerging. The low-cost high-tech model in telecoms is a great way to differentiate in the emergence of a more tightly knit, shared, stakeholder economy.

What does a fully digital MVNO look like?

Built on secure and redundant, modern cloud technology it provides infinite scalability. Architected with microservices and modularity in mind it is capable of weaving in internal and external digital services and APIs. Powering modern digital services and experiences in an economical and enhanced way.

On the consumer or business side, it looks like just any other good digital service that you have tried recently. Join from your phone and start using the wireless service immediately, with just a few clicks (using eSIM or delivery to live location). Have full control of your experience, including a ‘leave button’, full privacy, data management, and cost controls. Your wireless service, different IOT/ connected devices are part of the larger ecosystem of things needed.

It also should feel much more pro-active and helpful, more in context. Using real-time and often crowdsourced data. Think member powered network traffic congestion predictions, recommendations and delivery arrival times. Ordering a new phone case, finding a phone repair service or using your phone screen insurance should be an extension of topping up your data bucket.

You are set to speak at MVNOs World Congress 2020. What excites you most about the event? Why are you attending? What do you hope to gain?

We are excited to share our perspective and learn from other approaches around the world. A truly game-changing network technology – 5G – will be transforming wireless (in the next 3-5 years in a meaningful way) and there is loads of potential on top of that for the service innovation using new digital technologies.

We are at the right moment in time to make both transformations. Plenty of encouragement from other industries as Fintech and plenty of public interest to drive a smarter type of investment into essential infrastructure.

We are ultimately a telecom technology company and a startup. Constantly looking for ways to grow: technology, innovation, distribution partnerships, investment and business development opportunities.

 

In exciting news, Algis will be speaking at MVNOs World Congress 2020 in September in Berlin. Find out more about the event here.

Q&A with Michael Hunt of Mobile Technology Consulting

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece, Michael Hunt, Director at Mobile Technology Consulting and a telecoms professional with over 25 years in the industry, sat down with the MVNOs Series to discuss all things 5G.  

MVNOS: How can MVNOs position themselves now to take advantage of 5G?

Hunt: Whilst I think it is going to take a few years for the real effects of 5G to become apparent, MVNOs need to be mindful of the future and what is coming to ensure they don’t get blindsided. Right now the MVNOs need to make sure they get immediate access to the 5G networks, and on non-discriminatory terms. Currently the handset availability and the 5G coverage are such that in a practical sense I don’t think it matters, although from a market messaging perspective it does.

Pricing levels and structures also need to be kept an eye on. As data volumes increase, MVNOs need to make sure they have the capability to re-negotiate their rates (and structures) when appropriate – whilst it is great if this is written into a contract, in reality building the right pragmatic relationship with the MNO is more important here. In addition, I think that mobile will eventually move to a model where subscribers pay different amounts based on maximum speeds rather than on data volumes, as has happened in the fixed world. MVNOs need to watch for this, as if the market moves to speed based pricing, they don’t want to be left behind.

Ultimately MVNOs need to continue to excel at distribution and service differentiation at a competitive price to continue to be successful.

Will we see the emergence of new target segments or deeper penetration of existing segments?

I think it will be a combination of the two. MVNOs with good distribution channels and customer care will continue to succeed, but I do believe that we will start to see more business MVNOs, with a particular growth in fixed-mobile converged services. We have now reached a point where cloud based telephony platforms are becoming more accepted by businesses (replacing physical PBXs) and these cloud based platforms enable the call routing and control required to make FMC MVNOs a reality. This is still a niche market, but I do see it growing over the next few years. The increased level of home working brought on by COVID-19 is only likely to accelerate this trend.

Aside from the business market, I think there will continue to be growth for the mass market MVNOs with good distribution and marketing reach, as well as the number of small niche MVNOs coming to market.

What 5G use-cases hold the most promise for wholesale?

To answer this, you need to look at what 5G actually brings, and compare it to the value that MVNOs bring. At a high level, 5G brings increased data speeds, increased capacity (connections and throughput per unit area) and lower latency, whist MVNOs bring distribution expertise and can offer a differentiated service (technology or service based). In terms of data speed, I have yet to see many applications that need more than 4G speeds yet (even Netflix UHD only needs 25 megabits per second), and in a similar way to the increased capacity it is something that is available for everyone with access to the 5G network. The lower latency will in due course enable new services, but it should be remembered that the speed of light is not infinite, so latency will not be as low as touted for 5G until all content is local.

In addition, and this is still a few years off, network slicing will provide the capability for the MNOs to slice their networks and therefore provide differentiated levels of quality of service for MVNOs and/or other users. Whilst this is definitely of benefit to MVNOs if they get enhanced service quality for their specific proposition compared to the standard market, my view is that the main beneficiaries of this will be the MNOs, who will be able to price services differently for different levels of quality therefore keeping more of the service value for themselves.

How does IoT fall into this, especially with the industrial automation applications and automotive applications?

IoT will continue to grow and in terms of number of connections will likely provide the majority of growth in mature MVNO markets. However, the real monetary value in IoT has always been the selling of the services that sit on top of the connectivity rather than the connectivity itself. There is also a disconnect in the IoT market between what is paid for in terms of data usage and the perceived value to the customer. High data video is often low value, whereas low data SMS can deliver high value.

In terms of the 5G functionality, in due course, I think the additional density of 5G, the reduced latency and the ability of network slicing to enhance quality of service may have a positive impact, although I think this benefit is some way off.

Will 5G solve the “notspot” issue for consumers in remote areas?

I don’t believe it will. The “notspot” problem will be solved by building out new base station sites which can operate over 3G/4G or 5G, and may be shared by the MNOs. Only 5G at the lower frequencies are likely to help solve the problem, as at the higher frequencies there are range and potential line of site issues. 5G provides more capacity per unit of area rather than enhanced coverage.

You are set to speak at MVNOs World Congress 2020 in Berlin in September. What excites you most about the event? Why are you attending?

The MVNO World Congress is always the premier event of the MVNO calendar, and is a great place to catch up on the latest trends in the MVNO market as well as learn about some of the new technologies and their impact in real life scenarios (5G, eSIM etc). I am running an MVNO 101 workshop on the first day, which hopefully will help prospective MVNOs learn more about the process of setting up as an MVNO as well as some of the pitfalls to avoid, as well as moderating a panel on 5G: Friend or Foe for the MVNO. It’s always enlightening seeing the different perspectives from the various countries, and how the behaviours of the MNOs and the regulators differ, and the impact that has on the MVNO markets. What you hope for is examples of new MVNOs, technologies or ideas which make you go “why didn’t I think of that!”

 

In exciting news, Michael Hunt will be speaking at MVNOs World Congress 2020 in September in Berlin. Find out more here.

eSIM and IoT: Q&A with Alexey Gabsatarov

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Alexey Gabsatarov, Head of Business Development, Europe at Soracom Corporation Ltd, took the time to take part in this exclusive interview with the MVNOs Series on eSIM and IoT.

Where does eSIM fit into the IoT market?

Cellular GSM connectivity represents a fundamental enabling technology for the IoT market. Obviously, there are other wireless standards that serve specialized cases, but cellular has really emerged as the leading solution for connecting devices to the cloud. There are a number of reasons for this – like ubiquitous coverage, global reach, better and better energy efficiency (especially with recent developments in Cat-M and NB-IoT), and especially overall security.

Robust security is vital for all IoT projects. Cellular offers encrypted transmission between the device and the network, along with the ability to shield the device from the internet entirely. For over 25 years, cellular connectivity relied on removable SIM cards for authenticating devices to the network. eSIM essentially permanently embeds that card inside the device while providing an equivalent level of security. eSIM already is a fundamentally important technology for IoT and Consumer markets. In fact, around 50% of all devices we connect already have an eSIM.

What benefits does it bring? 

This new form factor brings numerous benefits for device makers. With eSIM, devices can now be much smaller, tolerate harsher environments (temperature and vibrations) and since no SIM slot is required, devices can be made completely airtight. Since the eSIM is designed to host multiple subscriptions, IoT service operators may choose to use multiple networks subscriptions with e.g. different coverage, cost or quality.

For Network Operators and especially MVNO’s, eSIM also brings unique benefits. Since there’s no need to distribute physical cards, Operators can simplify supply chains and reduce distribution costs. With eSIM, Operators can build fully digital e-commerce processes to service more use cases without having to rely on retail presence.

How is eSIM shaping this new world of connected devices? 

Consumers are increasingly interacting with apps and web sites provided by Network Operators to find and manage connectivity products. eSIM is a critical component to enable this connectivity-in-an-app approach consumers expect from modern services.

At the same time consumer connectivity is often seen as a component of a bundled offering with partnerships spanning much more than the usual broadband, TV, Mobile combo.  For example, travellers can purchase an option to be connected on arrival with their airline ticket.

We also see a strong demand for eSIM based connectivity in IoT projects.  Many device makers making the switch to the eSIM form factor, and we expect this trend to accelerate in the coming years as eSIM become more readily available, more affordable, and more familiar to hardware designers and manufacturers. eSIM is essential for many IoT projects at scale since it simplifies production and logistics. As an example, we’d expect the majority of Smart City and Smart Infrastructure projects to use eSIM for scaling out.

Why does eSIM make sense for IoT device makers and the potential use cases?

eSIM makes sense for device makers for two primary reasons: improved physical characteristics of the eSIM chip over the removable eSIM and the ability to provision network credentials over the air.

eSIM comes in a variety of standard and proprietary form factors such as MFF2 and WLCSP. This offers great options for device makers who can pick a form factor most suitable for their device. In addition to that, GSMA is working on certifying solutions based on iSIM or Integrated eSIM which would not require a separate chip and will simplify it even further. In general, the current trend for digitalisation and miniaturisation will continue. Use cases that will benefit from this most immediately include wearables, where we have already seen cellular enabled completely sealed off rings as a prime example.

Being able to remotely provision network credentials is critical to delivering IoT at scale. With manufacturing becoming increasingly global, many IoT use cases benefit from a single SKU which can be provisioned with specific connectivity option once the device is deployed without opening or even accessing it.

Where does the MVNO fit into the picture?

Being able to offer products over a fully digital channel is a huge benefit for MVNOs since it’s generally less capital expensive than maintaining a network of retail stores. In addition, many MVNOs find eSIM useful for accessing new market channels, such as distributors and resellers. It’s also easier to offer connectivity bundled with partners’ products which further benefits MVNOs.

For those MVNOs active or expanding into IoT markets, being able to offer eSIM based connectivity is increasing becoming the must for many IoT use cases. With the number of connected devices expected to climb to 13.6 per person by 2022, Consumer IoT is definitely an interesting market for MVNOs to consider for future growth.

You are set to speak at MVNOs World Congress in September? What will your talk be about? Why are you attending?

I am going to speak at MVNOs World Congress in September regarding eSIM adoption. Based on my industry and regulatory experience I can provide insight into both consumer and IoT eSIM adoption, current challenges and new developments. And I am excited to join MVNO World Congress to share this insight and get into discussions with industry colleagues and learn about their experiences.

 

If you liked these insights from Thandi, make sure to catch her talk at MVNOs World Congress 2020 in Berlin, 1 – 4 September 2020.

The MVNO private networking opportunity

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issue. In this exclusive thought piece, Will Townsend, a Senior Analyst responsible for Networking Infrastructure and Carrier Services at Moor Insights & Strategy, discusses private networking, and the opportunity it presents to MVNOs.

Private cellular based networking is gaining momentum globally for use cases that span energy, transportation, logistics, healthcare, mining, and manufacturing among others. Enterprises are beginning to tap its potential with current 4G LTE infrastructure given longer signal propagation outdoors and lower latency relative to Wi-Fi. As 5G is deployed, there will be dramatic improvements over LTE in the form of latency, throughput, and the ability to virtualize network functions. Private networking will also bring needed operational agility in form of fine-tuning performance for specific application needs.

The ultimate success of private networking deployments will lie in the ability for it to be delivered as an integrated solution. Consequently, Mobile Virtual Network Operators (MVNOs) are well positioned to capitalize on the monetization opportunity. Enterprises simply don’t have the competency to piecemeal cellular-based networks together, and MVNOs possess cellular infrastructure management “know how” that will be invaluable to enterprises. Nokia Enterprise in my mind is leading private networking infrastructure enablement for service providers and should serve MVNOs that wish to create managed service offerings. If interested, you can learn more details about Nokia’s offerings here.

In my mind, the democratization of licensed spectrum with initiatives such as the CBRS Alliance in the United States, similar initiatives and investigations in Europe and Asia, and the availability of non-carrier grade private networking equipment presents a unique opportunity for MVNOs. In a 5G world, operator leadership will be defined by innovative service delivery and not access. Private networking is poised to improve manufacturing yields in an industrial 4.0 era, create safer workplaces, and accelerate digital transformation in a multitude of industries. Those MVNOs that seize the opportunity have the potential to differentiate themselves and reap the financial rewards.

 

Mr. Townsend advises some of the largest networking infrastructure providers and carriers in the world. He has been featured on NPR, CNBC, in the Wall Street Journal, and frequently contributes on Forbes.com providing insights into both enterprise networking and 5G. Mr. Townsend is also ranked as one of the top networking analysts in the world as measured by ARInsights. In September 2020, Mr. Townsend is set to speak at MVNOs World Congress in Berlin.

Multi-IMSI, eSIM and eUICC, acronymic heaven or hell?

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this article Douglas Gilmour, Managing Director at Mobius Networks, demystifies some key questions surrounding eSIM technology, and what this means for the consumer.

There is some confusion in the market at the moment when someone asks for an eSIM. This usually means an embedded subscriber identification module (SIM)- a semiconductor chip soldered direct to the PCB, rather than the usual form factor we are all use to. But if it’s soldered to the board how can the end customer choose their network?

An embedded Universal Integrated Circuit Card (eUICC), also confusingly called an eSIM, may be the answer. This standard means that you can pick your Operator and roll out across the world. When the device wakes up you can load a local network international mobile subscriber identity (IMSI) onto your product and never have to worry about roaming charges since you are always local.

Another big advantage of eUICC is that if you decide to change Operator after your initial contract has run out you can then lift the whole estate to another network with all the negotiating power that brings. The downside is with flexibility comes complication and some additional cost.

Multi-IMSI is sometimes seen as a halfway house. You can load multiple IMSIs onto a SIM so that you can take advantage of Roaming in areas where coverage is thin. You can load local IMSIs if there is heavy lifting to be done. Effectively it turns the SIM into a least cost routing option. So it looks like eUICC without the additional costs.

But whereas with an eUICC SIM you shift the SIM from one network’s HLR to another, with multi-IMSI the fundamental relationship stays with the original provider. So if you fall out with them whatever reason the only way to change the estate is to change the SIM. Which in most IoT and M2M applications may not be possible.

With all of these acronymic options you may not know if you have made the right choice until you are three years down the line. By which point it may be too late.

 

This article is produced in the lead up to MVNOs World Congress 2020, Where Douglas Gilmour will be speaking. Read the full article here.

Multi-IMSI, eSIM and eUICC, acronymic heaven or hell?

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this article Douglas Gilmour, Managing Director at Mobius Networks, demystifies some key questions surrounding eSIM technology, and what this means for the consumer.

There is some confusion in the market at the moment when someone asks for an eSIM. This usually means an embedded subscriber identification module (SIM)- a semiconductor chip soldered direct to the PCB, rather than the usual form factor we are all use to. But if it’s soldered to the board how can the end customer choose their network?

An embedded Universal Integrated Circuit Card (eUICC), also confusingly called an eSIM, may be the answer. This standard means that you can pick your Operator and roll out across the world. When the device wakes up you can load a local network international mobile subscriber identity (IMSI) onto your product and never have to worry about roaming charges since you are always local.

Another big advantage of eUICC is that if you decide to change Operator after your initial contract has run out you can then lift the whole estate to another network with all the negotiating power that brings. The downside is with flexibility comes complication and some additional cost.

Multi-IMSI is sometimes seen as a halfway house. You can load multiple IMSIs onto a SIM so that you can take advantage of Roaming in areas where coverage is thin. You can load local IMSIs if there is heavy lifting to be done. Effectively it turns the SIM into a least cost routing option. So it looks like eUICC without the additional costs.

But whereas with an eUICC SIM you shift the SIM from one network’s HLR to another, with multi-IMSI the fundamental relationship stays with the original provider. So if you fall out with them whatever reason the only way to change the estate is to change the SIM. Which in most IoT and M2M applications may not be possible.

With all of these acronymic options you may not know if you have made the right choice until you are three years down the line. By which point it may be too late.

 

This article is produced in the lead up to MVNOs World Congress 2020, Where Douglas Gilmour will be speaking. Read the full article here.

Canadian watchdog ponders an MVNO invasion

The Canadian Radio and Telecommunication Commission (CTRC) has completed the first stage of its competition review as the watchdog ponders the competition conundrum in the country.

Between February 18 and 28, the CTRC heard evidence from numerous industry executives as the watchdog aims to improve the connectivity landscape for Canadian consumers. Preserving scale but inspiring competition is an interesting equation to balance, and in Canada, it could result in the encouraged creation of wholesale agreements. The land of Mounties and maple syrup could see an invasion of MVNOs in the near future.

“First, we will examine the state of competition in the mobile wireless market and whether further action is needed to improve choice and affordability,” said Ian Scott, CTRC CEO, during the opening remarks in February.

“Second, we will consider whether mobile virtual network operators, also known as MVNOs, should have mandated access to some or all wireless service providers’ networks and, if yes, subject to what considerations. On this matter, the CRTC’s preliminary view is that the national wireless service providers (Bell Mobility, Rogers and Telus) should be required to provide MVNOs with wholesale access to their networks, subject to certain constraints.”

The issue which remains at the heart of this situation is whether there is a fair deal for the Canadian consumer. As it stands, most Canadians are happy with the service provided, though prices are a worry. Tariffs have been increasing in recent years and it does look like a trend which will continue.

Canadian authorities have generally given the industry the benefit of the doubt, largely allowing an environment of self-regulation, though now it appears it needs to step in. Canada might have excellent network performance, but it is not presenting the consumer with a fair deal.

Country Average Price per GB (US $) Average download speed (Mbps)
Canada $12.02 28.76
USA $12.37 32.89
UK $6.66 22.37
New Zealand $9.79 32.72
Australia $2.47 16.36

Stats curtesy of Cable.co.uk

Download speeds in Canada would be deemed perfectly acceptable, even fast to some nations around the world, but the digital economy does have a very high barrier to entry.

What is worth noting is that this is not the first time the Canadian watchdog has had to step in, seemingly admitting the telco industry is not capable or mature enough to look after its own interests in a fair and reasonable manner. The CTRC has to intervene in 2015 to set up a roaming framework between the telcos, change regulations to lower the cost of SIM-only deals and make wireless voice and internet services part of the universal service objective to ensure continued network investment.

What is of course worth noting is that the status quo is firmly set against any change in the market. Telus, Bell and Roger have a comfortable position, with each telco collecting healthy profits; why would these giants want the prospect of increased competition to lower tariffs and potentially erode the profit margin?

The outcome of this review will hopefully be set rates to force the established telcos to offer wholesale services to MVNO entrants. This is a market where competition is stagnant, while the high barrier to entry makes it highly unlikely another MNO will appear in the foreseeable future. MVNOs are probably needed to disrupt the market and provide suitable competition, but it remains to be seen how effective the lobby efforts of the traditional telco interest is.

Q&A with Thandi Demanet of Tessellate Advisory

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Thandi Demanet, Director of Tessellate Advisory, sits down for an exclusive Q&A with the MVNOs Series to talk data and digitalisation.

What new business opportunities is digitalisation bringing to MVNOs?

Digitalisation offers a world of opportunities across all sectors, not least of which, of course, telecommunications. For MVNOs, the opportunity is the same, however they benefit from intrinsic advantages such as generally being more agile in structure, not dealing with as much legacy both from a technology and a cultural viewpoint…  Unfortunately, they also face unique challenges in the form of being largely reliant on MNOs, steep competition and in some cases the regulatory environment in which they operate (including gaps). MVNOs can and should innovate and experiment with new business models and partnerships which they can certainly do more swiftly than incumbents. This includes (but isn’t limited to) becoming partners with MNOs in new ways, collaborating to deliver new services and drive revenue for all in the value chain. Successfully seizing digital opportunities will depend on the ability to create and manage the right ecosystems, internally and externally. It’s also time for MVNOs to firmly address enterprise markets, especially in light of advanced digital services like IoT and 5G, find or create new markets, work with disruptors, or indeed become disruptors.

How can MVNOs harness data to maximise their business potential?

Data can be used to gain customer insight and drive loyalty, but also to uncover niches opportunities. We’ve heard the cliché about data being the new oil and the real value (like in oil) coming from refining it – analytical capabilities and looking beyond the data is what is needed, uncovering gaps and new market segments based on new services customers aren’t necessarily asking for yet. Data can be leveraged to harness “blue ocean” opportunities as well as enhance “red ocean” business – ultimately it comes down to the leadership’s (and board’s) vision and appetite for risk. Data in itself is a business, one with significant risks and potential rewards, but that is another topic.

What advice do you have for MVNO start-ups trying to succeed in the saturated MVNO market?

Following on from the previous question, those who succeed in a highly competitive, saturated (“red ocean”) market need to uncover new markets, develop new services for new needs that people/businesses may not realise they want or need yet. Visionaries like Henry Ford and Steve Jobs didn’t wait for the public to ask for a car or iPhone, they created demand by creating the product. A service that adds value to a business or customer segment is one with potential, then the business model wrapped around it is another issue and in the context of the digital economy, a considerable on stemming from the complexity of managing ecosystem monetisation models. The key is to identify an opportunity and go for it, not to wait to have the perfect plan or everything set up, but to move forward with a minimum viable strategy and be prepared to pivot as needed.

Are there any innovative MVNO business models that have caught your attention? Why?

Partnerships and ecosystems are the way forward as no individual organisation can singlehandedly deliver a complex digital service required by customers (whether enterprise or retail) in the digital, connected world. While opportunities are multiplied by these business models and while risk is shared, so too is reward and effective monetization models are still not in place. Commercial collaboration is unavoidable, but there remains a lot of work to be done on the financial engineering side. MVNOs have an opportunity to innovate and lead here. It’s about leveraging capabilities to co-create value.

Which disruptive tech should MVNOs be keeping an eye on in 2020 and beyond?

All the usual suspects, 5G, AI, IoT, DLT (distributed ledger technologies), AR/VR. These can be leveraged by MVNOs themselves to optimise their own operations and can also provide new sources of revenue. That said, companies should have a strategic plan before embarking on costly tech implementation initiatives and avoid just going with trends “because everyone in the market is going that way”. Again, partnering can be a great model to take advantage of and/or experiment with these.

You are set to chair a track at MVNOs World Congress 2020. Can you tell us a bit about why you are attending? What you will be doing there?

I’m very much looking forward to chairing the IoT track at MVNOs World Congress and getting into some deep discussions with industry leaders. This is always a great event to attend, it’s truly unique in bringing the breadth of the MVNOs community together and provides a level platform for peers, partners and of course competitors to engage and steer the industry forwards. IoT holds huge opportunity for digital and telecommunications service providers and I can’t wait to learn more about how MVNOs are seeing their future in this space, what actions they are taking and how they are innovating. It will be interesting to see as well how much the topic of 5G comes up in this track.

 

If you liked these insights from Thandi, make sure to catch her talk at MVNOs World Congress 2020 in Berlin, 27 – 30 April.

Virgin Media enters the 5G fight with Vodafone MVNO switch

Virgin Media has announced it will move its MVNO wholesale agreement from BT Enterprise to Vodafone, as the 5G engines start to rev.

Although the agreement with BT Enterprise does not expire until 2021, Virgin Media has said it will launch 5G services on Vodafone’s network ahead of this time. Virgin Media Business has also signed a wholesale agreement with Vodafone relating to the supply of various network services.

“This agreement with Vodafone will bring a host of fantastic benefits and experiences to our customers, including 5G services in the near future,” said Lutz Schüler, Virgin Media CEO.

“Twenty years ago, Virgin Mobile became the world’s first virtual operator and this new agreement builds on that heritage. It will open up a whole new world of opportunity for Virgin Media as we focus on becoming the most recommended brand for customers and bring our mobile and broadband connectivity closer together in one package for one price.”

While customer bundling has always been a prominent strategy for the Virgin Media business to increase customer loyalty, the mobile side has never genuinely attracted much interest in a UK market where MVNOs have traditionally played second fiddle. Pricing and bundling options have not been revealed as of yet, though with a prominent broadband business sitting alongside a refreshed content proposition, perhaps the Vodafone network might be the missing piece of the puzzle for mobile.

“We are delighted that Virgin has recognised the huge investments we’ve made, and continue to make, in building the UK’s best mobile network and our role in challenging the market with new commercial services,” said Nick Jeffery, Vodafone UK CEO. “As a result, they have chosen us to work with them in the next phase of their development.”

As it stands, Virgin Media currently has 5.6 million broadband subscribers, a 21% market share of the UK’s 26.6 million broadband connections. Project Lightning, Virgin Media’s fibre expansion initiative, will eventually pass 17 million residences, while ARPU for the broadband services has increased 0.5% to £45.39 for H1 2019. Prices are also set to rise by 4.9% on average for the remainder of the year to further grow ARPU.

Alongside the progress being made in broadband, the team has also refreshed its TV proposition. This was a pale imitation of content in bygone years, though partnerships with Sky, BT and Amazon Prime for football content could lead the TV services into the land of relevance.

This is a very healthy position to be in, however the share of mobile is much less attractive when you take into consideration how long the brand has been around. With 3.1 million mobile customers, Virgin Media’s MVNO only commands market share of 3.6%. This is the missing piece of the puzzle.

Mobile certainly presents an opportunity for Virgin Media to drive revenues forward, though the 5G world is becoming increasing congested. Alongside the four MNOs, Sky also plans to launch 5G services and we suspect there will be more in the pipeline. In a market with just over 84 million subscriptions to fight for, there will be a lot of choice.

Being a MVNO is not necessarily a perfect situation, though Virgin Media is in a good position. The convergence trend, bundling together services into a single bill, is a proven strategy to decrease customer churn and increase both ARPU and NPS. It might not have taken hold in the UK just yet, though there is plenty of evidence for the sceptics to mull over on the continent.