A new generation of worldwide connectivity

Full MVNO Not for Rookies

Magdalena Bay — Fri, 17 Nov 2023 11:09:33 +0000

Entering the Full MVNO space with its complexities involved in building and managing a full-scale virtual network, complying with regulations, negotiating infrastructure agreements, and competing in a dynamic market requires a certain level of expertise and experience. It demands a strategic approach, substantial investment, and a comprehensive understanding of the telecommunications industry and the specific MVNO market.

Reseller Model -> Light MVNO -> Full MVNO

The more customization is seeking a player on the market, the harder it is to achieve it under a Reseller Model (of the MVNO or, more often, of the MNO) in which usually no infrastructure of the MVNO is involved, and often the MVNO is selling under the brand name of the supplier.

The more the MVNO would like to gain independence from the MNO, the closer the model should be to the Full MVNO. The main characteristic of a Full MVNO is that it possesses all core network elements except for the radio network, which the host operator is delivering.

This setup involves significant one-off investment in the infrastructure, more expensive maintenance costs afterward, regulatory approvals, and coordination with existing telecommunications providers. Additionally, considerations for scalability and redundancy are essential for long-term success. At the same time, it allows us to have greater flexibility.

Why would I invest so much money?

A Full MVNO typically has more control and flexibility than a Light MVNO.

A Full MVNO typically has more control and flexibility than a Light MVNO. Some advantages of a Full MVNO include:

Greater Network Control: Full MVNOs have more control over their core network elements, enabling them to manage services, quality, and features independently.
Network Performance Management: Full MVNOs can manage and optimize network performance, ensuring a better quality of service for their subscribers.
Enhanced Customization: Full MVNOs can customize their service offerings, including tariff structures, branding, and value-added services, to better meet the specific needs of their target market.
Revenue Opportunities: With more control and flexibility, Full MVNOs have the potential to explore additional revenue streams through innovative services, partnerships, and tailored offerings.
Flexibility in Pricing Models: Full MVNOs can design and implement their pricing models. This can include competitive pricing strategies, customized plans, and the ability to adapt quickly to market or customer demand changes.
Control Over Customer Experience: Full MVNOs have greater control over the end-to-end customer experience. This includes providing high-quality customer support, managing service quality, and addressing issues promptly, leading to higher customer satisfaction and retention.
International Expansion: Full MVNOs with a robust network infrastructure can expand internationally. This expansion may involve establishing partnerships with operators in other countries, allowing for a broader customer reach.

Great! Then why do you discourage me from being a Full MVNO?

Successfully navigating Full MVNO challenges requires a combination of strategic planning, regulatory awareness, technological expertise, and effective business management.

Full MVNOs encounter specific hurdles, such as:

Infrastructure Investment: A significant investment in its core network infrastructure involves substantial upfront costs and ongoing maintenance expenses.
Regulatory Compliance: Compliance with telecommunications regulations is a complex and dynamic challenge. Full MVNOs must navigate legal frameworks, licensing requirements, and other regulatory issues in multiple jurisdictions.
Spectrum Access: Acquiring spectrum rights can be challenging and expensive. Full MVNOs need access to the radio frequency spectrum to deploy their own RAN, and obtaining a suitable spectrum can be lengthy and competitive.
Network Interoperability: Ensuring interoperability with other domestic and international networks is crucial. Full MVNOs must establish and maintain agreements with various network operators to enable seamless communication for their subscribers unless they have the assistance of the MVNE.
Scalability: Achieving and maintaining scalability concerns Full MVNOs, especially if they experience rapid subscriber growth. Ensuring that the network infrastructure can handle increased traffic without compromising quality of service is essential.
Technology Evolution: The telecommunications industry undergoes continuous technological advancements. Full MVNOs must stay abreast of these changes, ensuring their infrastructure remains compatible with the latest technologies to provide competitive services.
Customer Acquisition and Retention: Competing in a saturated market requires effective marketing strategies for customer acquisition. Moreover, retaining customers in intense competition is an ongoing challenge, demanding innovative services and excellent customer support.
Economic Viability: Achieving profitability can be challenging, especially given the initial infrastructure investment and ongoing operational costs. Full MVNOs need to carefully manage their financial resources and find a balance between service quality and pricing.
Service Differentiation: Full MVNOs must offer unique and compelling services to stand out. This requires innovation regarding service packages, customer experience, and value-added offerings.
Security and Privacy Concerns: As a telecommunications service provider, Full MVNOs must prioritize the security and privacy of their subscribers. Implementing robust security measures and complying with data protection regulations are critical to their operations.

Full MVNO setup for high-value-added services

Light MVNOs may be more suitable for those looking for a quicker market entry with lower upfront costs, especially if they offer low value-added services and cheaper p. In contrast, the FullFull MVNO setup has more justification within a high-value-added services business, such as cybersecurity and fintech, enabling them to offer advanced features and more customized experiences to their end users. Therefore, the ROI is high. Still, oft, of course, it is essential to assess each case individually.

A Full MVNO setup provides cybersecurity companies with the infrastructure and control needed to offer robust, protected communication services, aligning with their focus on safeguarding digital assets and maintaining high data security.

Full MVNOs have the flexibility to customize their network architecture and services, allowing cybersecurity companies to integrate tailored security solutions and features for their subscribers.

ARPU is the key

Using an example of a mobile market with the lowest ARPU in the EU of less than 5 EUR, which is Poland (5.42 EUR excluding VAT in 2022, based on statistics provided by a Polish regulator on their website), a Full MVNO model is difficult to justify.

The regulatory environment is another element that must often be considered when deciding if and where to launch a Full MVNO project.

A Full MVNO organization is a giant “machine” not only because of the need to have a whole technical team on board but also due to countless regulations that the MVNO needs to implement in the system, which usually would be provided by the MNO in the Light model. That can be a real distraction from daily operations and sales if not planned well and there are enough resources.

Poland: lessons to learn

These two factors, ARPU and regulations, are being reflected in the number of Full MVNO players having activity in Poland so far (in practice, there was only 1 MVNO that was launched and less than 5 in total that were in the process of implementation and, due to some reasons, has never started their operations, according to my best knowledge).

The EU average is 12.7 EUR, whereas Poland represents the lowest ARPU of 6.6 EUR includ. VAT

I find German telecom regulations quite complex, but despite this, Germany has seen higher adoption of Full MVNOs – what is the reason for that? It concerns the highly competitive market conditions and the tech-savvy and well-connected population contributing to a high demand for advanced mobile services.

My advice: Take it slowly and choose the right Partners

Considering a Full MVNO setup requires a clear understanding of your target market, a unique value proposition, and a well-defined business strategy. Factors such as market demand, regulatory environment, and ability to differentiate from existing services should also be carefully assessed. When talking to my Customers, I always explain that a Full MVNO project is complex and recommend taking such a decision in steps. Other big MVNOs proved that in the past by starting with a Light setup, gaining needed experience reaching a certain number of active customers, and switching to a Full MVNO.

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eSIM INNOVATIONS: Magdalena Bay speaking at the event organized by MVNO Nation

Magdalena Bay — Wed, 05 Apr 2023 09:01:43 +0000

Live speaking has always been nerve-wracking for me, so one of my goals this year is to practice it. Like most things in life, practice makes perfect. I count on your support to boost my confidence and help me feel more at ease.

As my presentation topic is trendy nowadays, if you’re attending MVNO Nation event, chances to learn something new are big by actively listening and engaging with all the speakers by posing your questions to get more out of it.

Join me at MVNO Nation’s MWC RECAP & 5G, Virtual Forum on 13th April 2023, where I will discuss new eSIM-enabled applications and devices.

This is a draft agenda of my presentation:

eSIM INNOVATIONS

12:05 – 12:25 BST
Exploring new eSIM enabled Applications and devices

What are the new applications that can be developed using e-SIM? How has the ecosystem changed over the last year?
How does e-SIM change the customer touchpoints?
What are the most recent case studies?
How is e-SIM changing the customer interfaces and applications’ ownership?

Will you join me there? https://www.mvnonation.com/mwc-recap-5g

The post eSIM INNOVATIONS: Magdalena Bay speaking at the event organized by MVNO Nation appeared first on A new generation of worldwide connectivity.

The Rise of MVNOs: Disrupting the Mobile Industry with Innovative Business Models

Magdalena Bay — Wed, 22 Feb 2023 17:33:13 +0000

Not everyone knows that the UK mobile market is one of the most competitive in the world, with four major network operators (EE, O2, Vodafone and Three) and over 30 MVNOs competing for customers on price and high-quality service to retain customers. The UK telecom market is also highly regulated regarding network sharing and number portability, which creates an additional barrier for new and existing players. The fact that MVNOs are still evolving in the UK proves that this concept is not outdated but is getting a new meaning. The growing popularity of an #eSIM is not the only trend reshaping the mobile market. Let’s investigate it.

Beginning of the MVNO era

The concept of MVNOs first emerged in the late 1990s when the mobile telecommunications industry was starting to mature. At the time, mobile network operators were building out their infrastructure and struggling to attract customers to the extensive cost of mobile service. The new idea of reimbursing their investment in the network arose. Smaller telecom companies could enter the market and purchase network capacity from the MNOs. The first MVNOs were launched in Europe in the early 2000s, and they quickly gained popularity, offering mobile services. In the UK, Virgin Mobile, founded by Richard Branson’s Virgin Group, became the first #MVNO to launch in 1999, using the One2One network (now T-Mobile UK). Virgin Mobile rapidly gained an impressive customer base by offering competitive pricing and new services. Other MVNOs soon followed, and by the mid-2000s, there were dozens of them operating across Europe.

In Belgium, it all started with the launch of BASE in 2004 under the brand name “JIM Mobile,” targeting the young generation with affordable mobile plans. The Belgian telecom market had a specific background, contributing to the high number of MVNOs in Belgium. First, the government offered a limited spectrum to be used by the MNOs, creating a favorable regulatory environment and opportunities for smaller players to enter the market. Then, the Belgian market has always had a high demand for low-cost mobile services as consumers are known to be cost-conscious.

Difficult MVNO market in Poland

The launch of “mBank” on Polkomtel’s network in 2006 marked the beginning of the MVNO business in Poland. Even though there were many MVNOs launched in Poland, their share in the market is still tiny. The industry is growing slowly as the market is difficult (MVNOs were allowed to join the market later than in the other countries, as per the telecom regulator’s demand, there is a low ARPU and high pressure from the MNOs).

Similarly, the beginning of the MVNO business in the US started with smaller players seeing an opportunity to create a competitive edge by offering additional services on the market dominated by a few large carriers. The first MVNO in the US was Virgin Mobile USA, which launched in 2002 and used the network of Sprint. Afterward, 2003 Tracfone was established in 2003 and 2004 – Boost Mobile. Their business model was based on prepaid with no contracts. In the following years, the MVNO industry continued to expand at a different pace, depending on the region and the telecom regulations in each country.

One-size-fits-all is not an effective business strategy

Looking into MVNOs that were trying their chances in Poland and failed, what is extremely important is to find your niche. We all know the saying, “If something is good for everything, it is good for nothing.” Our product or service cannot target the whole population as a “one-size-fits-all” strategy. We will ensure that customers’ needs are more accurately identified and fulfilled if we attract specific groups. This way, we will avoid market dissatisfaction from either not tailor-made products or services or a mismatch between individual styles and a mainstream flow.

Do you have your niche?

I could name here plenty of ideas on finding a niche, defined by:

Demographics – seniors, kids, Polish in Denmark, international travelers.

Offering added-value services and additional product functionalities – tracking, no charges on data used in WhatsApp, a device insurance and cloud-based services

Affinity group – church, a club of mothers in Poland, a federation of car users

Call destinations – cheaper calls to Ukraine

Can an IoT be an MVNO?

An IoT player is not necessarily an MVNO, but it can be. IoT players provide products or services connected to the internet, such as smart home devices, industrial sensors, or wearable technology. These devices typically require a network connection to transmit data to the cloud, which can be analyzed and acted upon. An IoT player may work with an MVNO or an MVNE/A to provide network connectivity for their devices.

Remember that MVNO is a company that does not own its physical network infrastructure. It provides connectivity based on access to network services from the MNO. An MVNO may choose to specialize in providing connectivity for IoT devices only. Still, when the market is so competitive, all the players try to be as flexible as possible, offering services for Voice/DATA/SMS and fulfilling customized requirements for other projects. MVNOs are generally much more versatile than MNOs, thanks to not carrying the high costs of building and maintaining their network infrastructure. That is one of the reasons why I recommend my customers choose a Full MVNO model only in exceptional cases. Having a lean organization and a tailor-made billing platform, they have flexibility, allowing them to adapt quickly to dynamically changing market conditions, build new price plans, and respond promptly to customer requirements.

In some cases, an #IoT player may choose to become an MVNO to have greater control over the network connectivity for its devices. By becoming an MVNO, an IoT player can customize the network (if he becomes a Full MVNO, he has his core infrastructure, except for the radio network that belongs to the host operator) to meet the specific needs of their devices. However, this is a complex and costly process, and many IoT players choose to work with established MVNOs instead.

A simple price plan is a key to success

MVNOs have a hard time competing on price with the big dogs. But nowadays, even preparing for benchmarking has become a process since operators offer different bundles, making it impossible to compare them. Where an MVNO can step in is creating a unique brand positioning in a chosen market segment. “Unique” may be identified as innovative; however, inventing something entirely new makes sense only if your potential customer is interested in purchasing. It also needs to be relatively simple and not too complex when it comes to billing – both for your customer to understand it and for your operational team to settle. Finally, your proposal should be based on a solid business case, showing you won’t lose money on your product.

In my opinion, the most significant chances to win have these players, who already start offering mobile services to an existing customer base and have a portfolio of other services to add wireless connectivity as one of them in the bundle, such as TV, internet, and fixed phone to create more attractive packages, ideally, together with hardware. But that is not enough – the success of the MVNO will depend on their ability to think out of the box.

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