Searching for value – the evolution of MVNOs requires focus

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 is needed. MVNO strategies need to evolve, so that they first identify the 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?

MNOs, B2B Markets, MVNO

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