Mohan Kuman Sundaram is chairman and co-founder of plinthenabling customers worldwide to offer innovative mobile services.
Leading the wireless “wave of the future,” mobile virtual network operators (MVNOs) have traditionally focused on sales and marketing by leveraging their brand equity. But what are they and how are they useful?
MVNOs are defined as operators that use a mobile network operator (MNO) network with other services outsourced to the MNO or intermediaries, such as mobile virtual network aggregators (MVNAs) and mobile virtual network ablers (MVNEs).
These wireless capabilities have already taken off in places like Latin America, Europe, Asia, and the United States. They are especially popular with consumer brands, ethnic groups, communities and affinity groups such as football and other sports clubsas well as with religious groups† In Austria, for example, Red Bull has successfully expanded its brand into MVNO service by offering value-added content, exclusive benefits such as event invites and merchandise that appeals to its audience. Similarly, UK retailer Tesco has expanded into mobile services in the UK, Ireland, Slovakia and the Czech Republic. Italian Post, Standard Bank South Africa and Australian energy giant AGL have all launched MVNOs.
Why launch an MVNO?
Launching an MVNO has several benefits, including adding a lucrative business stream through brand expansion, synergy with existing operations, increasing customer loyalty and engagement, leveraging community, or strengthening customer relationships.
Let’s take a closer look at each of these:
† A permanent customer base: The key drivers for launching an MVNO are engagement with a company’s current customer base, access to undersized or niche segments, the ability to provide differentiated value propositions, and potential synergies with existing companies. All of this is possible within a captive audience or customer base, with all content delivery remaining within a specific audience for maximum impact.
† Brand extension: MVNOs enable brands to offer an extension into mobile services, leading to an additional revenue stream and helping to increase customer loyalty and engagement. It also provides an additional opportunity to cross-sell other products and services owned by the brand. For example, we see many banks setting up MVNOs because of the increasing convergence of banking and telecom.
† Synergy with existing companies: Energy and gas companies can offer MVNO services to offer converged services as a package and also add value by offering ‘connected home’ apps. Broadband and fixed line companies can also go the MVNO route to diversify and offer mobile services.
† Leveraging existing communities: MVNOs typically offer differentiation and customized services and rates, as they typically target niche segments or affinity groups (such as language, religious, and cultural groups, and sports clubs) by offering customizations, including closed user group rates and value-added services.
† Additional revenue opportunities: Segment-oriented MVNOs can offer customized and highly specific services. For example, data-centric or machine-to-machine (M2M) MVNOs can cater to specific Internet of Things (IoT) use cases such as telemetry and telematics applications. These segments are normally ignored by MNOs as these are low ARPU services, but a specialized MVNO can focus and build a viable business case for serving these segments
Entering the MVNO Universe
The MVNO business presents a great opportunity for a brand with more than 5,000 visitors per month to its stores, or many visitors to its websites. For example, companies in sectors such as consumer goods, utilities, banking, mobile phone and SIM distribution, IoT and retail can expand their brand with mobile services.
But how does a company become part of the MVNO universe? Intermediaries such as MVNAs can make setting up an MVNO simple, with an end-to-end package including wholesale airtime and roaming links, separate from the full SaaS stack, enabling a rapid service launch.
MVNAs can also lower the barrier to entry with scalable plug-and-play solutions.
ROI and the MVNOs of the future
You may be wondering what the return on investment is for MVNOs. Most see it in the form of improved customer-friendliness, lower marketing and promotion costs, more responsive customer service, and additional revenue opportunities — all stemming from the main appeal of the customized experience. That’s why you may soon see even more MVNOs, coming from banks, travel agents, energy companies, and even bands looking to stay connected to their fan base.
The most attractive aspect from a consumer perspective is access to customized rate packages and bundles in addition to exclusive services and value-added content.
Are there any drawbacks? Yes. Lower speeds due to lower priority of the MNO can be a problem in some cases; however, regulators around the world ensure equal treatment for MVNOs.
From the brand’s point of view, developing and sharing exclusive content offers a glimpse into today’s consumer world, while also building a receptive audience for the foreseeable future – all without invading privacy or drawing their attention. distributed among outside influences. That makes the MVNO experience worthwhile for many audiences.