What do operators have to do to win the data-MVNOs battle?
“MVNO as a concept has been there for almost 10 years now but has failed to gain significant subscriber market share or make profits. The MVNOs were envisaged to provide service differentiation or lower cost of ownership but most of the MVNOs failed to live up to the expectations. However, there is now an opportunity to look at a different value proposition which is data MVNO.”
This is the starting paragraph of a more-than-recommended article publish recently by the TelecomCircle. It’s funny to see the increasing demand of this topic either in mature and emerging markets (Remember our previous post related to MVNOs in Africa, right?).
The article comes to explain how new entrants in the MVNO space appear with the objective of supporting their products thus having a strong value proposition and using the “mobile data” component to provide a better experience to their customers.
There’s a special remark in the article to one of the areas that is likely to explode in terms of growth that is M2M (machine-to-machine) MVNOs and how this area is supposed to be successfully developed in the next years. As more carriers across the world build 3G and 4G networks, we agree on the fact that there will be excess capacity within the operators. We fully agree that operators understand voice very well but when it comes to data, their efforts and innovation fall short of expectations. They took a long time to understand the dynamics of voice but cannot afford to spend same amount of time to get a grip on data services. Collaboration is the only way out and hence carriers would be more open to data only MVNO.
Just an example. Take a look at the article posted by Martin Varsavsky in his post “gadgets that twit themselves“. His company (fon) focusing in providing WiFi access services through one of the biggest WiFi networks around the world, is thinking on making their small wireless routers twit by themselves to provide real time info of their activity to their owners. Nice idea. These guys will rely on their WiFi capabilities to de-intermediate mobile operators but, as they say, there might be several other gadgets and/or machines that could also benefit of such a service through a mobile data network. Interesting right?
How should mobile operators react to this? What should be the operator’s apporach towards these potential new data MVNOs? Is it necessary to be an MVNO or can we close network agreements with the MNOs? Where are the niches that should be addressed? How to design a profitable business model? These questions were addresses in the PoV that we prepared for a telecom executive in the UK and that I think is worth reading. The market data and competitive positioning apply only to the British market, but the conclusions and insights apply to any operator.
Enjoy the reading!