By Alain Bureau, CEO, Sisteer
Since MVNOs first began to emerge in mobile markets, their impact on host operators has proven so significant that the latter have had to up their game in order to deliver the ultimate wholesale mobile services experience to an enlarged customer base.
However, in the changing mobile network landscape, where margins are being squeezed and the costs of customer acquisition and retention are mounting, there are a number of issues that MVNOs must address, and changes that must be made.
First, they must choose their host network platform carefully, considering the costs involved and the quality of its operations for customers.
Then they need to establish whether must-have services, including 4G access, can be offered by partnering with a specific host network.
Further, they must learn to leverage their commercial assets (distribution network, brand, customer base) and core business, for example by offering free air time for non-telco services.
They must also look into how customers are using the internet and optimise their use of social networks to acquire new customers.
Finally, they should strive to improve their business model with a full MVNO architecture.
MVNOs that offer a limited service portfolio are very likely to fail. Few reach the critical size that gives them the ability to buy hardware and software, run integration projects, hire technical staff, and manage the tricky processes involved in hosting their offering.
For those that do, the question needs to be asked: is their organisation ready to absorb the above changes?
If MVNOs control their capital and operational expenditures from the outset and team with technical experts possessing quality processes and infrastructures, they will have a greater chance of succeeding.
Outsourcing service providers like mobile virtual network enablers (MVNEs) are emerging as key partners for both mobile operators and MVNOs, allowing them to accelerate the launch of hosted offerings, reduce financial risk from both sides and benefit from an efficient cost structure.
MVNEs have the infrastructure, the people and the skills to quickly launch new brands on several markets with a very low capex. They can offer the full benefit from economies of scale, and gather volumes from other MVNOs and markets.
Where once they were viewed by mobile operators as obliged intermediaries, today MVNEs are considered valued business partners.
They offer one-shop turnkey services and products, the best rates on today’s markets, and technical and business acumen that MVNOs can embrace to roll out a competitive mobile offering in a matter of weeks.
NVMEs can deliver mobile operators the end-user volumes they crave—and equip them to implement the changes they must make to survive.
That’s why MVNEs are fast becoming the Holy Grail of mobile networks.
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