The MVNO market continues to present a growth opportunity but competing on price is increasingly unsustainable to all but a few. Instead, a clear strategy that includes a more valuable set of services that are optimised for user needs and their device capabilities. MVNO strategies need to evolve, so that they first identify value they can deliver and then determine how they can do so profitably. By taking the right steps now, they can position to secure a place in the growing market.
Our industry is beginning to collectively recognise that MVNOs cannot simply join a race to the bottom. While the pioneers of the MVNO industry brought clarity and focus to low cost offers, this is not an approach that can be endlessly replicated. There’s a limit to how low you can go and how many offers can be the cheapest.
In particular, with positive forecasts indicating that MVNO revenue will continue to grow, it’s worth asking how they will achieve this? After all, chasing the cheapest customers simply won’t be sufficient – and, regardless of anything else, it will also have a significant impact on profitability.
So, if MVNOs wish to ensure profitable growth, they need to do more. As this article points out, they can attempt to increase engagement by tailoring offers and opportunities to device capabilities but it also notes that there are other things that can be done. Key to this is a clear strategy, based on differentiation and targeting of specific segments – which must also include offering something more than traditional voice and data services.
Value add is crucial. To be successful and to capture a part of the revenue available, MVNOs must be able to offer something more to their chosen subscriber base. Successful MVNOs recognise this – they provide services that are tailored to the needs of the chosen customer base, or highly targeted content and complementary offers. While there are many different approaches, one that has met with consistent success is the delivery of
Our customers, for example, deliver valuable enhanced communications capabilities for business users based on a deep understanding of what they need and how they can deliver something different. They choose business customers for a number of reasons, including:
- Lack of available offers from traditional MNOs
- Specific needs of industries, such as financial services
- Higher spend of business users
- Need to separate public and private identities
- Intra company communication and collaboration
It’s clear that MVNOs have a significant opportunity ahead but they have to ensure profitability. Choosing to chase the cheapest customers may be a viable approach for some that have the pockets to fund customer acquisition at scale and to endure low margins but that’s not an approach that is tenable for many. Instead, they want to capitalise on the opportunity by developing a profitable, sustainable business – and the only way to do that is to develop a clear strategy and to ensure efficient execution.
If you want to grow as an MVNO, then you need to pick a market, understand what it needs and deliver it. At Gintel, we can help you develop a proposition for business customers and show you what it takes to succeed. Why not get in touch to learn how our customers have built profitable businesses by targeting SMEs, B2B customers and specific industry segments?
B2B2x represents a new market opportunity to telecoms operators. What does this mean?
Telecoms operators are eager to explore new markets and to find ways of delivering value to enterprise and IT customers. One approach is to expose network and IT assets to partners, so that new functionality and capabilities can be delivered to their customers. Is this a brand-new opportunity for operators? How can you capitalise on it?
A new market opportunity has been identified by a number of consultants and analysts. Known as B2B2x, Arthur D Little (ADL) defines it as “the business opportunity of operating customers’ digital solutions”. The idea behind this is simple. It’s really about the integration of telecoms and IT service capabilities with applications used by the enterprise to offer services to their customers, whoever these may be – hence the “x”. They could be other businesses or else consumers. Either way, it is the blend of telecoms and IT capabilities with business services that adds value and enhances the offer to the chosen customer base.
This is forecast to generate a significant market opportunity. In the same report, ADL suggests that the value of this market could reach more than $300 billion by 2020. That’s a big number but, while some caution must be used, it’s clearly suggestive of considerable value to be uncovered by telecoms operators, who are currently searching for new opportunities.
The thing is, this is not new. At least, not to Gintel. We’ve been helping Tier 1 operators unlock and deliver value to enterprise partners for a number of years. We’ve achieved this in two ways. First, by providing API-enabling solutions, such as our Telco 2.0 Gateway and second by enabling access to the Easy Business Communications Suite.
Of course, there are a number of API exposure solutions but few that have been so tightly coupled with real-time network assets. That’s a key difference. As telecoms operators explore B2B2x opportunities, they need to be able to consider how to enable flexible and selective access to key resources that, in turn, deliver value to their partners. Previous industry attempts to achieve this have largely floundered because they have been designed by committees and have been forced into compromises that mean they cannot deliver on their promise.
However, we’ve done this repeatedly – our solutions have been in service for years, enabling new opportunities to be created, supported by the innovation of key business partners. We provide a gateway that exposes key network and service layer functions to external partners.
This allows them to integrate enterprise, premise-based or other cloud solutions with assets in telecoms networks. This helps both smaller businesses access fully hosted solutions, that are enhanced by the integration capabilities available, as well as larger enterprises with considerable investment in their own IT systems and solutions evolve from purely on premise models to hybrid of fully cloud-based solutions, as the API integration provides a bridge to new capabilities and functions. The external partners, often in combination with systems integrators generally undertake the enhancements and integration, allowing telco assets to complement existing or new business service, unlocking new innovation.
And that’s the key – it’s the business partners that often provide the innovation but it’s the telecoms operators that have the assets they require. Putting them together requires a consistent, agile yet suitably secure and carrier-grade approach.
If this market is to flourish, then it needs telecoms operators to support the access that new partners need, in whatever form they require – and it doesn’t need to be driven by standards committees that cannot resolve internal debates. It just needs innovation and expertise from key stakeholders, such as Gintel.
As ADL points out, unlocking this market requires telecoms operators to possess both industry insight and the capability to quickly offer relevant customer solutions. But the underlying platforms also need to be in place – so it’s a combination of commercial and technical agility that’s required.
As telecoms operators seek to leverage their assets and explore new market opportunities, they need the right partners to support this shift. Why not talk to Gintel and learn how our proven expertise has enabled operators to capitalise on B2B2x opportunities?
 “Major strategic choices ahead of TelCos: Reconfiguring for value”, Arthur D Little, 2016.