“The MVNO challenges are real, and so are the opportunities”
A fitting title for Optiva’s webinar on (yep, you guessed it) the challenges and opportunities for Mobile Virtual Network Operators (MVNOs). The telecoms market is always evolving, with silent revolutions constantly taking place. Right now, it’s mobile connectivity.
MVNOs are primed to take telecommunications by storm. By the end of 2022, 1986 MVNOs were active on the market. Global revenue from MVNO-in-a-Box services is also set to grow 250% between 2024-2029, hitting $1 billion by that time.
No doubt about it – the only way is up for the MVNO market.
But what are the opportunities for MVNOs? How can businesses avoid the pitfalls and seize the potential? Thanks to a collection of experts under the watchful eye of Graystone Strategy’s MD James Gray, it all becomes very clear.
Satisfying customer needs
Ambitious organisations can’t succeed without being customer-centric. Among the assembled panellists, the consensus on addressing specific needs and providing real value was shared. Differentiating and serving those needs is critical to guaranteed MVNO success.
The target market needs to be identified and understood. They’ll have specific requirements that will drive which products and services they adopt. If businesses aren’t addressing that target market, they’ll be well off the mark.
Salman Tariq, VP EMEA at Optiva, explained how understanding the customer base can create new ideas. Celebrity culture, for example, can “[drive] an interest in influencer-related MVNOs”. Emerging mobile entities are attracting underserved banking customers in Africa as they promise to “help… manage financial and communication needs”.
Banking is leading the way in these emerging markets. After all, Capitec’s own MVNO are seeing 8000 SIMs being sold in their branches every week. But, as BT’s MVNO Director Nick Wooten points out, balancing high acquisition and low churn is an area the most successful brands pay attention to.
Building a strong brand and sales channel makes a difference. A recognisable brand with a developed sales and marketing strategy is more likely to reach the target audience. Salman highlights how, due to tech stack evolution, differentiation can be found in numerous forms today.
He notes how Humane are deploying Generative AI to “meet the needs of younger mobile users”. In Saudi Arabia, Salam Mobile’s “laser focus on high ARPU users” has resulted in 1 million customers. Gamma’s Business Director for Service Providers Mike Mills adds how the travel sector, while “underserved at the moment”, will soon “see niche MVNO players pop up” as eSim takes off.
That day is coming soon, with the eSIM market estimated to be worth $6.29 billion by 2034.
Then there’s customer experience. (CX) No matter the size or sector, everyone needs to provide the best customer experience possible. These stakeholders want a seamless, positive experience that builds brand loyalty and drives growth. When a brand provides excellent CX, 93% of consumers are more likely to come back for more.
Mike underlines how business MVNOs must pay closer attention to that unbeatable service. Demanding customers “want more than a mobile connection” when their workforce is dispersed, plus “absolute clarity” on billing. Gamma itself has already seen success in their own unified communications offers.
MVNOs must meet their customer’s needs and demonstrate value beyond just a lower price. But what about the services themselves?
Technology as a tool for disruption
When it comes to new service offers and delivery models, digital transformation is a driving force. Disruptive MVNOs will be using digital models to distribute their message. Anyone with a digital footprint is more than capable of becoming an MVNO.
Mike uses the example of social influencers and the massive reach to audiences. Before, it wouldn’t have even be considered an option, but thanks to technology, it’s now a “viable idea for an MVNO”. That opportunity is ready to be taken advantage of.
Nick also mentions how Gen Alpha “expect to live, communicate, and transact in an online-first world”. Turns out 43% of that generation have a tablet before aged 6. MVNOs need to keep an eye on this, or else they’ll fail to meet those expectations. In terms of capability, being able to “switch out an offer online and update an app” should be top priority.
To achieve all this, a strategy must be in place.
The components needed
Across the buyer journey, customers want a seamless digital experience when interacting with a brand. Digital-first CX, especially among younger generations, is a key factor in holding their attention and establishing trust. From purchasing to future engagements, a seamless experience is what the people want.
For Salman, MVNOs need to think about their channels to market and then that end-to-end delivery. If businesses are “[digitally] native from the start”, then entering the market now won’t put them at a disadvantage. But they must never forget about the back end; operational support systems (OSS) and business support systems (BSS) must be able to take the strain.
What matters the most, of course, is “driving a consistent customer experience”.
Digital platforms also have that added advantage of being cost efficient and flexible. They can easily adapt to market changes while offering significant savings compared to older, more traditional retail models. For brands that can drive revenue and sustain it, they’ll be more likely to secure investment.
Both Mike and Nick agree on this point. Agile brands will be in a “stronger position” if technology is used correctly. Legacy systems aren’t the best place to launch any kind of mobile network operator (MNO) sub brands. Their shortcomings would make launching tariffs “difficult… the proposition can’t be delivered on”.
What any prospective MVNO should be doing is partnering with digital providers. A reliable partner can provide platforms and expertise that accelerates digital transformation. “They have the answers”, as Nick aptly puts it.
These providers have done all the heavy lifting and can “plug into your plans”. They’re ready to tackle the “high-energy, high-cost design and build”. As Mike adds, it’s what makes mobile virtual network enables (MVNEs) “pivotal to market acceleration” and guarantees a reliable, competitive MVNO.
Combining all three of the components mentioned creates a winning strategy.
What about AI?
Some are inclined to say that AI and CX is a match made in heaven. It’s a tool that not only improves customer experience, but also automates laborious tasks and uncovers insights from large datasets. When done just right, AI can certainly supercharge customer experience.
All three panellists had something to say on AI. For Mike, it’ll be a while before all that data “can be turned into something meaningful” However, AI’s role in tasks such as note taking and transcripts will make up “a big part of the market”.
AI, in Nick’s opinion, is more than capable of complex data management, including personalisation. Across the industry, everyone will find their own use for it and extract value in their own unique ways. But “it will be MVNOs, without the technology baggage, who will find the use cases first”.
Salman states that, although MVNOs are still getting to grips with AI, “some first-mover propositions coming through”. He advises that all of us keep an eye out for more GenAI assistants soon. For now, it’s still early days in terms of widespread adoption.
It’s a common trope to talk about AI’s game-changing nature. The possibilities are endless, exciting, and even a bit scary. MVNOs, despite the opportunities at hand, are still vulnerable to plenty of pitfalls.
Speaking of pitfalls…
Becoming an MVNO is no spring picnic. Yes, the market is growing, but as Nick mentions, “it’s the few that are delivering the real growth”. Their “sticky proposition” is generated from a loyal customer base and is a common sight in retail.
Nick also introduces the concept of the ‘Vanity project’ trap. Some organisations are guilty of being unaware if the market exists in the first place. “Build it and they will come” is the wrong attitude to have, especially if distribution has been overlooked.
Building a visible brand is an expensive venture – “don’t underestimate the cost and effort”.
Large enterprise MVNOs, for Salman, also face challenges when integrating existing tools. They may show interest in digital transformation, but they must “worry about what is under the hood”. Only now have they realised Software as a Service (SaaS) can ease their integration concerns.
Finally, Mike focuses on commercial agreements and the cultural fit. He mentions how Gamma has spent many years “[wrestling] with commercial models”. It has taken time to match MVNOs with ones that “reflect the value and the goals of the business”.
Cultural fit though is “just as important”. A launch can fall short if nobody can work together and maximise potential. When commercial agreements and cultural fit are in place, businesses are in a “strong position to build propositions that will work”.
The insights from the panellists on the pitfalls MVNOs face show that, as Nick says, “there are no short cuts”. By being aware of the challenges, MVNOs can begin to make their mark on the market.
Becoming an MVNO
It’s clear that MVNOs, now and in the future, have numerous opportunities and challenges ahead. Understanding the target market, demonstrating real value, and committing to a seamless digital experience will build the foundations for success.
This vast, ever-expanding landscape will be shaped by technological innovation. MVNOs will be more than capable of delivering that heightened experience while working more efficiently. AI is certainly the one innovation that comes to mind.
But the challenges and pitfalls must be understood, and subsequently avoided. Integrating services, championing culture, and steering clear of an ‘Vanity projects’ are just some of the issues that need to be navigated.
What matters to any MVNO is finding the right partner. Tailored solutions provided by Gamma guarantees the support and flexibility needed to thrive in such a competitive market. With the right vendor by your side, that world of opportunity is there for the taking.