Thursday, 31 January 2013

Nokia MVNO

Nokia MVNO

The Nokia MVNO rumour first surfaced in 2008... remember this was way before Microsoft, iPhone had only just launched a phone with a proper radio in it (iPhone 3G) and Android was on version Cupcake (1.5) and Donut (1.6) with the main device being one from HTC that had spoilers on it!

Since then a lot has changed :) however Microsoft devices appear to have their market with 4G? The article which caught my eye was this one, saying Verizon may get a high end Lumia (yes, another rumour .. I am sensing a trend too :)). But bear with me;
Could the service retail and even MVNO model be the WP8 market sweetspot? commented here in MVNOs from a customer perspective there is a  definite shift to where mass market that want an unlimited bundle and untamed device go to the main network operator. MVNOs compete more effectively on their own terms, creating niches... which, forgive me if I am wrong, but appears to be where maybe WP8 can be very strong, especially an LTE 4G MVNO?

Similarly, there are a lot of Android handsets out there that are ideally suited to the MVNO, for example the keyboarded smartphones and moreover the Samsung Duos series, as much of the MVNO growth in recent years has been via SIM duplication, not SIM substitution, at least in the US and Western Europe with high % MVNO market share... and who else does mass market dual SIM devices... ah yes which brings me full circle to dual SIM Nokias... :)

Original Nokia MVNO Article (2008)

Nokia Hardware MVNO

Reportedly Nokia is planning a Hardware MVNO in Japan, which would push the OVI portal services within this market. As correctly pointed out in this article, by Rethink wireless that Nokia has found it difficult to enter the Japanese market due to the operators' insistence on using i-mode type services, these services will not necessarily be a barrier to the success of a hardware andon device portal MVNO.
In essence the i-mode model is an early learner mobile portal, not dissimilar to the AOL online model, where people are provided a safe environment, which also becomes a familiar environment, due to mass adoption, however it is one people eventually grow out of. The evidence and historical evidence of this can be found in the two following lessons:

Firstly, if we look at the rise and fall of AOL as a portal to the fixed line, it rose and fell with dial-up. AOL provided a cost efficient an effective way to get on-line in the pre-broadband stage, when what is effectively a walled garden worked well. As the beginnings of what we now call web 2.0 came along as well as broadband, we had to climb out of our analogue shell and into the digital world, helped along by the magic of google. part of the pain of adoption that had to be overcome was moving over to the monthly line rental and learning what ADSL means and what an upstream and a downstream where...The mobile world has now catapulted itself into this mass market phase, from 2006 when we had 176 x 208 screens with tens of thousands of colours, operators would share with me how they struggled to get over 7 days per month WAP or mobile internet usage out of even ABC1 clients. In this space, i-mode wins, and the uptake of i-mode over WAP in Europe shows that, as does the uptake of AOL fuelled internet over that of the typically dial-up model in non AOL territories. In 2009, we have GPS enabled QVGA+ 3"+ screens with millions of colours and HSDPA and wi-fi, and the world is a very different place. OVI lets you upload your photos to flicker and VOX, video call, IM chat and everything you once dreamt of doing on a laptop but practicality never allowed, can now be done, and that is something that will be driven by an "open" Nokia approach, rather than the unspeakably annoying operator approach, whereby by Orange branded Nokia interrupts my second photo while I have to cancel it asking me if I wish to upload the first to my Orange album, even though I have refused every attempt it has tried for me to set-up and Orange album... (after having carried out what seems like decades of user testing for Nokia, I can only imagine Nokia's horror when operators ask for features like this) and why would i want to share my items with just other orange users, presumably in the UK, when my network has outgrown this model and Vox and Flickr let me share with the world, even after I have left Orange.

Secondly, device connectivity has moved beyond the control of the mobile operator, and with it the user has outgrown the heavily modified handset. People now want an iPhone, or an N96 or a C905, and they do not want it to have been messed around with too much, like the "upload this photo to Orange" intrusion, I also want to update my software when Nokia have made it available, not when the operator has had time to play with it and tweak it: While operators like Vodafone in the UK are very good at releasing updates for their variants, my N82 on orange is still stuck on its original build 10.x where the internet radio still does not work and a handful of other bugs are present, all of them removed on the build 12.x that everyone else is on. Then there is the connectivity, like with the online scenario: When we only had dial-up, we did not mind AOL commandeering our modem and stopping any other pesky diallers eating our money. however, in these days of multiconnectivity, we do not want AOL messing with our vodafone 3G connection or wi-fi hotspot connection. In the same way, we are tired of having an operator driven phone full of bookmarks that respond with "this service is only available via GPRS..." every time we are on wi-fi.
In short, the Japanese mobile internet is the most mature mobile internet market there is, and I would suggest they are ripe for a hardware MVNO, as the predicted 1 million iPhones by the end of 2008 suggests. It seems that here in Europe the market is headed the same way too. Twice now, the issue of debranding Nokia phones has come up in conversations. In both of them I mentally recorded what USP would trigger people's desire to change: 1) the phone as Nokia intended it? No; 2) having all the VoIP and other software your operator does not like? No 3) potentially having a more stable phone? No; 4) being able to access a full range of software from Nokia Beta labs and other software from the "download" section of the phone? done, yes please... what do I have to do to debrand my phone...

posted by Christian Borrman 19:26pm 24/11/08

Wednesday, 30 January 2013

why Europe's MVNOs still sing

Europe's MVNOs still singing 7 years on...

Six years on from the original article, and 13 years on from the first European MVNO in the UK, the European market is still singing, fortunately!

MVNO market share Europe

Why is this? Well partly as written in my Future MVNO article of a couple of weeks back; Europe is on the higher side of the highest MVNO % of MVNO market share, and that's a big deal. So if one MVNO in one country can represent as much as all the MVNOs in other countries, there is still a long way to go, and every indication that wholesale can represent much higher market share in mobile as it does in other markets. 
W. Europe is at the higher end of high MVNO market share

While Europe and the US are far ahead of the rest of the world, Europe is far ahead of that, with the UK at 14% MVNO market share, and countries such as Denmark, with Telmore MVNO at 800,000 customers in Denmark... and only 3 people live in Denmark! (I lie, its actually 5.5M...) which makes high double digit MVNO market share for just its biggest MVNO!

Why European MVNOs sing

So what contributes to the European MVNO flurry? Well, in order:


The GSM network gives Europe a strong advantage, whereas the first MVNOs in the US were using CDMA, CDMAs have lower yield and lower margin and the switch of a handset is a churn catalyst in CDMA, whereas in GSM MVNOs changing handsets is just a churn opportunity

MVNOs and handset

The buoyant handset market has contributed heavily, in countries like the UK sponsored by MNOs, in countries like Italy funded entirely by the user, and in the UK the iPhone phenomenon saw premium rates. When the iPhone launched in the US it was yours unlimited for $22 per month, in Europe the compulsory extra unlimited data bundle for iPhones was not far from that alone!

MNO MVNO dynamic

The MNOs paid quite a lot for 3G licences, and needed to amortise this investment - wholesale has become the MNO cash cow in Europe, and the above factors allow this to be quite a milk machine!

European MVNO market

The European MVNO market is diverse: despite the "common market" coming in to place an embarrassing amount of time ago, Europe is very, very far from a "common market" - Roaming is still a chore, and 9% of Europeans live in another member state, yes 9%: the niche is the MVNOs friend and Europe is full of niche markets

Original why Europe's MVNOs still sing Article (2007)

RE: Why Europe's Mobile Start-ups Sing

Different markets require different business and marketing models
I was sent an article from Business Week with the above title via email by a client; one of those nice comforting articles that make you feel you have made the right choice by doing many of the things that are in the article as they preach is right, with the added smugness of feeling you are doing something a little extra they have not twigged yet!
They are right in that one MVNO model is the low cost route, however there are more important keys I have seen, from behind the scenes, that have made or broke MVNOs in Europe:
  • One is a good network deal: Never underestimate the value of good advice before embarking upon something as hard to chew as an MVNO. There is no point keeping other costs low, if your single most important cost base is inflexible. These situations remind me of heavy industries with inflexible human resource, only instead of being an inevitable legacy issue, it is more a best avoided product of "staff from legacy networks" issue, which brings me to the next point;
  • One's thinking behind an MVNO has to change, it is not a mini Mobile Network: It has to be approached carefully, and its business model needs to be audited by all those involved.
And this is where the otherwise spot on article loses the thread: it comes to the opinion that the only MVNO model is "no frill" and that the US MVNOs are missing this entirely. Both of these are wrong in my opinion:
  • Firstly, "no frills" is not the only MVNO model for Europe; it is just the only one that has managed to master the two points above: thinking differently and keeping costs low. However, there have been casualties, both of which had the "no frills" model that the article preaches, but made both of the grave errors above.
  • Secondly, "no frills", like many European models, is not a model for the US; just look at the all popular iPhone as an example: In the US, AT&T are selling the iPhone for as little as $59 per month. For that you get the all important iPhone, unlimited data, 5000 off-peak minutes, 200 SMS and 450 inclusive minutes... As the iPhone launches in Europe, and more specifically the UK, I very much doubt it will be had for £25 per month, let alone with unlimited data (although on 2.5G only, "unlimited" is not that much!). Where is this going? In the US, mobile, like most consumer goods, is already "no frills" in price, so MVNOs in the US have to compete on other VAS, like the examples of Healthcare in my now ageing but once best selling Next Gen MVNO report... and for those of you thinking this is a plug, its not, its worse; its a "I told you so" ;-)!.
The real MVNO models are yet to come, and while in Europe they will definitely have to be competitive on price, in both the US and in Europe, and the Rest of the World, customers buy, recommend and repeat purchase on many things above price, and I would suggest even the successful "no frills" MVNOs, when you scratch below the surface, have succeeded on qualities offered to their customers beyond price.

posted by Christian Borrman 11:26am 25/09/07

Thursday, 24 January 2013

MVNO 2013 Rome Conference

The MVNO 2013 Rome

The MVNO conference is moving to Rome from Barcelona!

MVNO Awards

There is an exciting new MVNO Awards to recognise innovation in MVNO, I will be on the judging panel and really looking forward to this exiting new development


There will be some interesting discussions on LTE in the MVNO MVNE space during a breakfast briefing and a panel, etc I will be chairing, so look forward to that as well! 

Meet MVNO Blog

I shall be there for the whole event, use the MVNO contactify link top right or one of the social network links to get in touch...

...and much more, see below:

MVNOs World Congress 2013
Date: 22-24 April 2013

Event description: The event is in its twelfth year and is the flagship event in the seven-event global #MVNOIS series.  Moving to new venue city Rome in 2013, the event will focus on the global opportunity for MVNOs with dedicated streams on CEM, M2M, LTE, WiFi, Quadplay, Retail, Brands and Roaming.

Event Highlights:
·         NEW! MVNO Start-up Summit – introducing the CEO’s of the newest MVNOs to the stage to answer audience questions on wholesale SLA’s funding, marketing, launch and gaining those vital subscribers!
·         NEW! MVNO Awards - celebrating the latest innovations and success in the MVNO industry
·         Dedicated Focus Day on Brand, Retail and Roaming – featuring Poste Mobile Italy, The Post Office UK, Tchibo, Trace and Virgin Mobile, Dobrytel and Roam Mobile.
·         Dedicated Stream on CEM and Partnerships – featuring Solavei, *bliep and Ting
·         NEW! Breakfast Briefing: 4G Wholesale by Alex Besen - In-Depth Look at 4G LTE Wholesale Business Models & Partnerships
·         NEW! The Congress moves to Italy this year.  Make the most of your opportunity to network and socialise in the beautiful city of Rome.
·         Global Focus – Global MVNO update covers Europe, Asia, the Middle East, Africa, Latin America, Central and Eastern Europe for the most comprehensive insight into international MVNO activity
·         NEW! Focus on Central and Eastern Europe – reviewing and analysing the latest MVNO launches in CEE
·         Extended Exhibition, on-site demos and networking opportunities. See the latest innovations and meet leading MVNEs, MVNAs and technology specialists.

Monday, 21 January 2013

Nokia 5500 output

Original 2005 article support page for the Healthcare MVNO:

It's hard to imagine now that Apple has made us believe that it re-invented everything, again, and again. but in 2006 this little sub £200 smartphone had text to speech and motion sensors, etc. And was able to deliver the health / healthcare MVNO back then. Whereby my health insurance provider then gave me a usb pedometer, and still tries to make me use another brand of heart rate monitor, simple phones like this, and now any smartphone can provide a proper health diagnostic and reward healthy, active customers. There were then people with prototype Bluetooth blood sugar, blood pressure, heart rate and other healthcare devices. Moreover for me: the Garmin watch, etc was invented, I could finally track my sports. Note to self - not really improved that performance much...

Screenshot of pace in km/h from Nokia 5500

Testing the Nokia 5500, went for a run with it in the back pocket of my running shorts rather than using the belt that Nokia recommend for the device to work, but it still gave a pretty accurate result, albeit distorted by the fact that it starts from when you start the device, which if you are like me, is about 5 mins before you actually get out and start jogging... in any case, these results were sent via MMS, as email did not work, but there is a program to upload this to the PC. The text automatically saved to my run diary was:
Name: Running 1:13 pm
Duration: 00:34:25
Distance: 6.29 km
Avg.speed: 11 km/h
Calories: 475 kCal
Steps: 4814
The application can also use a Bluetooth GPS accessory for true accuracy.

Sunday, 20 January 2013

Future MVNOs and future MVNO models

Future MVNO

The future of MVNOs has been a long time coming, however there is still a long way to go, and the activity of 2012 shows that we are in for a very interesting 2013 MVNO wise, which will reflect well for the Telegeography predictions for 2013
There is still huge untapped opportunities in MVNO
However there are two things that strike me from this:

Mature MVNO market share

Market share in mature markets such as the UK, arguably the most mature as it was the first MVNO market and the two big originators of the MVNO; Virgin Mobile and Tesco Mobile, now have way above the W. European average at 13.7% of the market just to themselves, down from over 14% the previous year.
Source: Informa Mobile media 2011, EE market estimate Innovation Observatory Research
The above Diagram has been used by EE in their MVNO address for the past few years, and hints at huge potential in the MVNO market, but as an MNO presentation only touches the bigger picture. 

MVNO Brand Segmentation

If we dig deeper, as I do when doing the marketing plan and product development for new MVNOs, we see that each segment of the MVNO market to date, even markets that claim to be overcrowded  like the Ethnic, Supermarket and Brand MVNO space, are not actually overcrowded at all:
Segmenting even mature, overcrowded MVNO sectors shows there is still a lot of opportunity
For example, the overcrowded Ethnic MVNO market in the UK is not in fact overcrowded at all; the big players' competitive analysis shows that they have saturated certain markets (probably 20 of the 258 countries) and certain demographics, but far from the whole sector. The same rings for the Supermarket MVNO and even the Brand MVNO space, the above date has been randomised and renamed to protect the innocent, but am more than happy to give anybody the template with the date, use the MVNO contactify link to get in touch.

Updated Future MVNOs

So what is left to do in the below? Well the answer is quite a lot: 
  • Music is still in the pre-wholesale strategic sign-up phase, as is content, but you can expect the whole audio, video and other content market (think Red Bull MVNO model) to mature and expand.
  • Data MVNO has expanded, with Dell and Lenovo doing a Laptop based deal, Kindle in ebooks, Tom Tom for GPS and the whole M2M space
  • Healthcare has been successful in the US, and has lots of promise globally, with even Telefonica restructuring in 2012 to include a whole m-health vertical, which probably means its still in "the MNO can do it" mode, however this will soon change as MNOs dip their toes into the water via MVNOs
  • Converged MVNOs are really coming, with Virgin Media adding 1 Million Tivo boxes to its 4 Million mobile customers and presumably even more broadband, expect a wider definition of convergence than we may expect is all I can say...
  • The Global MVNO is also coming, however as we can see from the top graph, it needs the disparity between the various markets to meet, or at least more markets to reach the 10% MVNO market share for it to kick off.

Original Future MVNOs Article 2008:

Future MVNOs

Future Mobile Virtual network business Models
There are many upcoming MVNOs in the pipeline, however they are very different; they seem to be more mature, building on a core business proposition and mobile as a channel, rather than playing directly in the mobile space with a brand. For me the hottest MVNO prospects are:
  • Music MVNOs, with wholesale data and even "all you can eat" data tariffs emerging but being slow to take-up, this model could work well. However, it will not be download as much as you like to a "free Nokia N91". It is more likely to take the form of an established music brand enabling either an On Device Portal to browse, find and purchase music, even download a certain amount of lower quality/realtone tracks immediately over 3G, but the general ideal will be to download and save them on a PC or shared network space and upload them to the device by memory card or even USB connection. As an advocate of wireless & mobile I have found it difficult to admit, but the fact is that MP3s over bluetooth, 3G and even Wi-Fi, just don't make for a great user experience, nor aid battery life - the spanner in many mobile cogs!
  • Data MVNOs, building on mobile broadband, either by reselling or repackaging existing services, such as O2 mobile broadband, which is already resold by many players in the business as a service provider or enhanced service provider by hardware resellers, M2M providers and other solution providers and system integrators; or more complex solutions, which may or may not creep over into other areas above and below, such as hardware MVNOs.
  • Healthcare: the opportunities are huge: I pay a handsome sum of money every month to an insurance company, less now I have filled in various profiles... the next step is for my insurer to give me a Nokia 5500, which could easily be paid for and more with my insurance, and which uploads my daily footsteps info to their database to reduce my premium when I exercise regularly. To see the output a healthcare MVNO would see from a Nokia 5500 click here. A lot easier than the pedometer my Health Insurance gives me now, and a proper MVNO revenue opportunity.
  • Content MVNO. The content MVNO can work, despite the demise of ESPN, but it will be based on data usage with maybe an On Device Portal or a custom OTA firmware, where the "Vodafone Live" button starts the customer experience, rather that custom handset, and the business model will be around the value of that content, rather than trying to compete on minutes with the network; it has to be a content blackberry in terms of user take-up.
  • Global MVNO. There has been little talk of this model, and so far we have just seen a few SIM based products, however, there is a huge market for the global traveller  from big city banker to individual consultant with passport, will travel, all the way down to interailing youth. There are many VAS that can be added to this model, from student info to VoIP or even just automated calling card applications.
  • Converged MVNO. People have Skype, Dect phones, mobile phones, work IP phones, work analogue phones, SOHO phones, IM, SMS, uncountable emails, some web, some on exchange, some on their laptop/desktop... there is space for converged MVNOs in every sector, its just a question of who will move first, and watch everyone follow. Or Has Apple already led, and it will take the followers to not be so preoccupied with exclusivity and 40% to realise that convergence, and a X% of their mobile, broadband and roaming is a better deal...
  • More coming soon...
Originally posted by Christian Borrman 18:50pm 11/11/08

Dell hardware MVNO

The evolution of the hardware MVNO model

The hardware model was a long time coming, the Dell MVNO is now Global, and Lenovo has joined the fray, who will be next? Will update soon, subscribe/follow to hear when!

Original Dell Hardware MVNO 2008:

Dell Hardware MVNO

Back in 2004 when I was finishing my 2005 Next generation MVNO report, I had a "Dell MVNO" hardware MVNO that Pyramid in their eternal wisdom decided was not a viable model and edited out. This model has formed the basis of the Apple MVNO/network agreements and the reported Nokia MVNO. We have seen services such as the carphone warehouse and Vodafone branded laptops, but when are we going to see the long overdue Dell MVNO, and will it be dell or another manufacturer like Acer or ASUS, or even HTC?
here part of the fourth go to market model that was in my original Next generation MVNO report, from 2004:

Dell, Sony? data MVNO

This model differs from the HP and IBM MVNO, in that the model involves IT companies that do not own a business intelligence/consulting arm, and therefore the dynamics are different, although the target market is very similar. Dell has lead the way in enterprise IT, and especially laptops for two reasons: one is the three year onsite warranty, and the second is the latest technology at a reasonable price. All Dells’ business laptops can be ordered with all three modes of WiFi and internal Bluetooth, with the latest technology at an unbeatable price. We have also seen Dell diverging into new areas new markets, such a printers, television and recently PDAs. With the advent of wireless adding questions marks to company future remote access requirements, and a dilemma for the consumer and small business market, the ability to offer not just smartphones as an extension to the PDA and laptop market, but also the data side for the PDA and laptops, is a very attractive proposition for the entire customer Base.
The implementation model should stay at the wholesale side (unlike the HP model) leveraging the Dell name to obtain wholesale agreements for both wifi and GPRS, as well as voice scenarios which can include VoIP with public network termination throughout the world from its dell computers and PDAs.
The MNO can benefit from a huge channel to market that is the dell sales channel and existing customer base, plus increased data traffic.
Implementation Model:
Hybrid to ESP
Business model:
horizontal; Dell data MVNO
MVNO Advantage:
Synergies in sales
MNO Advantage:
High data revenue, low SAC
Customer advantage, USP
One stop shop

originally posted by Christian Borrman 19:26pm 24/11/08

Converged MVNO

Original Converged MVNO article 2008:

Converged MVNOs

Convergence and the Mobile Virtual Model work well together, in principle
I once set-up a converged MVNO with my own hard-earned cash, that was in 2001... It seems that this model is now about ready for market! However, it is a very different model and a very different market.
In 2001 I set up a converged MVNO based on business use, where the primary focus was voice, as other such as bluephone, then BT fusion were focused on voice. However, the focus has now shifted to data; the reason? One is that regulators have pushed down roaming charges, the other is that users are more savvy and have multiple phones. The real reason is that voice, which is what GSM was invented to do, not data, is very effective over licensed spectrum, with multiple slots giving high(ish!) quality, and within the present price landscape, the ability to "bargain bucket". That is, there is nothing stopping any mobile operator bundling more and more minutes to squeeze out converged competition, at least in the single-country environment in which spectrum is licensed.
Data, however, is a different matter, with the idea that we will all be walking around watching IPTV, downloading MP3s, email attachments, pictures and videos, while having a video call... well the licensed spectrum bandwidth is just not there, at any price.
It is an interesting twist that just 7 years after I first spoke at 3GSM Cannes and caused silence over my intention to push email and voice over Bluetooth in offices, a silence caused by the imminent threat of losing money, that you can download an application called truphone for free to do just that over wi-fi, you can get your email over the mobile network via blackberry, using sms that are not charged for... and nobody is making the money that I was offering the host mobile networks (MNO) back then by operating a converged MVNO.
There are converged MVNOs however, and many MVNOs have invested in broadband in order to facilitate the already undertaken testing and research, some examples:
  • O2 have bought Be, one of the better broadband ADSL2+ providers, the parent Movistar already has Broadband
  • Orange have bought Wanadoo, multinational
  • Vodafone not only have broadband, but also host the BT converged MVNO, one of only a few commercially available
  • Cingular, Bell, Orange, Vodafone, and many others were testing the earliest convergence products by 2002 and 2003, shortly after I began testing them in 2001
However, there have been very few commercially rolled out services:
  • BT Fusion, was Bluphone, to a small UK MVNO audience
  • Tesco in simple VoIP format
  • Bell have rolled out trials, but it has not been the next mobile killer application a la PTT by a long shot
  • ... hopefully coming soon
originally posted by Christian Borrman 18:51pm 07/05/08, last updated 13;11 25/05/08

Apple Global MVNO

Original Article 2007

Apple Global MVNO

Apple deal with operators is a de facto hardware MVNO
It is no secret that a typical MVNO may only manage to get a 10% to 40% margin on calls, onto which it has to add its costs. This is usually OK, as many of these have either already been sunk, written off or are as low as they can go if the MVNO core business is already a “no frills” card calling or other related business. However, it is still said margin before costs. It is, therefore no surprise that the most successful MVNOs so far have been “no frills” MVNOs as reported in by Business week in this article and as per my response below (previous article; RE: Why Europe’s MVNOs sing).
As far back as 2003, when I started writing my next generation MVNO report, I had the hardware MVNO as one of the next big business models. The two main contenders were Apple and Dell. Dell fell victim, in the UK at least, to Vodafone’s deal with Intel to give away 3G data cards with every Centrino laptop in exchange for merely signing a direct debit for the Vodafone SIM inside it. The Apple MVNO, however, has finally come to bear fruit, and in a way nobody could imagine: It is a Virtual, Virtual MVNO, as according to these articles in the Financial Times and the BBC, it has managed to get between 10% and 40% margin for all the iPhones, and on top of it no costs. The extra burden of billing, one of the biggest costs for an MVNO, is borne by the host network operator, as it’s the second major cost: customer care. Furthermore, it has managed to do what very few MVNOs have managed to date, export the model to become a global MVNO. To boot, its business plan manages to overcome the other great hurdle to any MVNO expansion: handset subsidies; as people are falling over themselves to buy an iphone, something to date that only Nokia and Sony Ericsson have managed to do with a premium handset to date (8800, 8210, N95, P800, P900, etc). You have got to hand it to Apple, they have pulled off the biggest MVNO coup to date. There is one final even more surprising fact, no, not that they managed it without my help (apart from buying a copy of my report): The biggest surprise is how they have managed to actually get the MNOs to bid against them, rather than the usual beauty contest that building an MVNO entails. Mobile Network Operators have not been in that seat since they managed to bid UK and Germany 3G licences into the billions. So how have they managed that?  It’s simple, due to the nature of the way networks were set-up, in larger economies there are networks that are predominantly focussed at a certain demographic. In the UK, the larger part of the youth market is on o2. However, it will not have escaped any of the networks that they could have poached a good few of the other’s customers.
So, for the record virtual mobile network operator, means 10-40% plus costs; virtual, virtual mobile operator means 10% to 40% with no costs, well at least if you are Apple.

Orignally posted by Christian Borrman 11:26am 25/09/07

is there still value in MVNOs?

Original article

Is there value in MVNOs?

I have received an email from Pyramid with this title. It is amazing, two year's after publishing "next generation MVNOs" that Pyramid finally ask if there is still value in the last generation MVNO... Well no; there was no value in them anymore in 2004 when I began writing the report, nor was there in 2005 when it was published, and there is less still today. Today's MVNO is a much leaner operation that its forerunners like Virgin. As successful as Virgin was, it was created in the late 90's when spending $20Bn on a 3G network weemed like a good idea. Today's MVNO should have now got down to a T the ideas I put forward in 2005, and the key to a successful MVNO or Mobile Virtual Network in 2007 and 2008 will be:
  • Handing over "legacy" cost bases to the host MNO or even the handset manufacturer. MNOs handle huge risk every month: every month the UK MNOs and even handset sellers put forward their forecasts for sales. To give an idea, Nokia UK typically sell 500,000 handsets every month in the UK, their best month was 2 million handsets... so even a few hundred thousand handsets up or down on a mobile network operator's book, or even a large manufacturer like Nokia, well is not a huge issue. However, put this discrepancy into every MVNO business plan I have seen, and I have seen most that have passed the UK MNO, consultancy or investment market, and the business model runs into problems. The MVNO opportunity today lies clearly in new markets, lots of niche markets the MNO and even handset manufacturer cannot / do not directly capture or target. If they want these markets, they can either sponsor a music festival or two at the cost of a few million, or they could spend the same or less managing handsets for niche MVNOs with direct sales as a result.
  • Niche, Niche and Niche; The MNO brand will only stretch so far, niche MVNOs can capture new markets or keep existing users.
  • MVNA: the MVNE will not punt on small players, MNOs will not punt on anyone but "the next Virgin", however there are millions of subscribers in the UK alone who have very strong ties with major brands, events, social movements, clubs and other would be MVNOs, who 10,000 subscribers here, 30,000 subscribers there, add up to 100,000s of subs put together. They may all be different, but they do have a few things in common: simpler tariffs, smaller handset selection, more focussed customer care. The MVNA is just around the corner.
  • Cost reduction; gone are the days of warehousing branded phones with custom software; the clever MVNO will "brand" the handset Over the Air (OTA), either with an On Device Portal or an OTA software upgrade
DIY MVNO. US company Sonopia are offering user the ability to set up an MVNO in 10 minutes and receive 5% of the revenue. While this article, reported on The Register suggests that this model may not be popular in Europe, where the handset, then the tariffs, not content, which I agree with, it does propose an interesting trend: That MVNOs should compete on something other than on handset or tariff to e competitive, and that network generated income should be a revenue stream, not the sole source of revenue for the MVNO business model. Having written, contributed to, carried out due diligence on many MVNO business models over the last 8 years, and in light of the failures of EasyMobile, it is clear to me that the post Virgin and Tesco MVNOs will need to leverage their brand, content and or other much more effectively, to counter the fact that economies of scale in this market are a thing of the past. Realistically, going forward MVNO need to base their business model on breaking even on 10,000s of customers, not the millions or 100,000s that the many jumping late on the MVNO bandwagon seem to band around. Competing on handset and tariff is the domain of the MNO, not the MVNO. Added to this, it will not be long before people realise how expensive network subsidised phones actually turn out to be and look to source their phone separately, to then focus on a "network" that offers them the content, services, or simply just the bitpipe for voice and text that the individual wants.

originally posted by Christian Borrman 06:50am 05/04/07

mvno and the brand

MVNO and the Brand

We have heard a lot about the brand MVNO and MVNO and the brand, unfortunately most of it is confined to the conference room and reports.

Brand MVNO

The Brand MVNO is where it all started; Virgin Mobile UK spent a lot of money on promoting their brand, and they were right - look at how much money Vodafone started spending on its brand post Virgin success vs. before! The problem was, Virgin then went to conferences saying: "don't copy us unless you have £50M to spend on your brand" which the MVNO industry unfortunately generally read as "don't spend anything on your brand". The Brand MVNO Model is covered in this post.

MVNO Brand

The Brand is a critical part of every MVNO, from the pitch to the MNO to sales:
  1. The MNO is putting its faith in the MVNO ability to access a market - without a brand, how long will that last? Brand is one of your strongest MNO negotiation points!
  2. In fact all your MVNO partners will be sizing up the opportunity of your brand when they negotiate with you, as Brand = ability to sell, ability to distribute
  3. The brand will determine your your uptake and limit your churn. Remember, Remember that MVNOs live and die on acquiring customers cheaper (than the MNO can) and keeping customers longer, and the Brand is key to this.
  4. There is a role for the niche within a niche with brand: Brand helps you compete within even an extremely competitive space such as the Ethnic MVNO market

MVNO Brand as part of Marketing strategy

However, be aware of how you use your brand: see matrix below; many MVNO brands today are in the dangerous "follower" space, especially those that do not have a defined MVNO marketing strategy. Some may try to come in at the Leader level, however this has its problems, the key being that it is expensive to maintain: you can find yourself at a monthly / quarterly review renewing media that just is not effective at selling because it is protecting your brand, you may also be even considering subsidies or at least a large amount of arbitrage/utilisation risk on your bundles to get here...

Virgin mobile entered as the challenger, and did not move into the leader position until maybe 2-3 Million customers when it essentially became and MNO brand of its host, began subsidising handsets, etc, etc.

MVNO Brand Values

Becoming a challenger is not hard: if at first you have defined your product and segmented your market, the brand and its values should not be hard, but check, do those value ring through? An overwhelming feedback in the latest MVNO conference in Paris, from Red Bull, NRJ, Bleip and more leading brand strategy MVNOs commented on one thing: NO SMALL PRINT. If your brand is simplicity, honesty, etc, small print goes against this. Most MVNOs win over the MNO on simplicity, if you look at the MVNO segmentation post. Does your MVNO product reflect your MVNO brand, is what you are doing new, or just rehashing what the MNO does???

Work these simple points out, and not only will your negotiations with your MNO and other partners be simpler, but your MVNO will benefit is acquisition and retention - in this sense, every MVNO is a brand MVNO!

Original MVNO and the Brand support page:


For a brand to have any value it must mean something to the customer and to do so it needs to be exclusive. This is not compatible with trying to own all areas, sectors and parts of the market with just one brand, as most mobile operators do today. Because of this, most mobile operators' brands are all over this matrix. Note that successful MVNOs, like Virgin Mobile, started as a challenger and are now becoming brand leaders, whilst minimising any association with the "follower" values.
©Copyright 2001-2005 Christian Borrman, All Rights Reserved. Reproduction Prohibited

mvno from a customer acquisition perspective

MVNO from a Customer Acquisition Perspective

One thing that is often overlooked by MVNOs is to look at the MVNO from the customer's perspective. This is important, as one of the quickest routes to failed MVNO bin is to create a mini-me mobile network, as you essentially create a product that has no differentiation  but somebody else's version has much more marketing, retail presence, support, existing customers, etc.

The customer perspective is an important reminder if the fact that as an MVNO, while you are a partner of one MNO, you are a competitor of the other MNOs, other MVNOs on your host network, and more importantly, your host MNO if you are not careful. Why is this important? Never lose site of the fact that tmobile he wholesale business is all about acquire customers, a

MNO to the Customer

The MNO's routes to market before the MVNO were typically either direct, via a retail store, which may or may not be its own now and via a service provider, see the red and red/blue sections below. Essentially, for the MNO, the MVNO (and MVNA) has allowed the MNO to reach a wider customer base (grey section) than the MNO ordinarily would have. The MVNA is critical, as it is the "last mile" attracting the most niche markets. The triangular shape of the MVNA indicates how the MVNA is where the most bleeding edge activity is happening  such as micro-MVNOs with just a Facebook page, where the brand almost belongs to its customers, and customers may go from brand to brand.

MVNO to the customer

The MVNO to the customer route is important as the MVNO has to realise that, while they may have an angle to their niche, they also have strong competition from a) the network operators, who have shiny marketing, and b) that a customer is by now a complex beast, and other MVNOs and indeed, smaller niches from MVNAs may be equally attractive.

Moreover, it is important for the MNO and MVNO to be honest about which customers in a niche they are better at attracting and maintaining. You, the MVNO, may own a niche lock stock and smoking barrel, however by the time you get to a customer who wants a subsidised iPhone and unlimited texts, data and voice... its it not better to pass that customer on your your host MNO as a lead???? 

Customer to the MVNO

Why is the customer going to chose your product? If you just rebrand an MVNO, what value are you adding? Do not underestimate small value adds, sometimes the simplest things like customer care in your language is enough, and key: its a differentiator!

I reality, if we look at the grey customer section, it goes from niche on the far left, to mass market on the right.

Original MVNO from customer perspective page


To Fully understand the MVNO, and moreover Next Generation MVNOs, we have to look outside the legacy network led definitions of an MVNO, as an MVNO is customer driven, and therefore business driven business model. From a customer perspective both the MNO and the MVNO are their "Network Provider". That is Virgin Mobile is seen to its customer as their network provider, not the host MNO, just as an MNO is seen as a network provider. The benefit here for the MNO is sales without marketing spend, but more often than not sales the MNO was unlikely to reach on its own.
A service provider, or airtime provider would be like Martin Dawes in the UK for example, which was one of the originally mandated airtime providers in the UK; here, both the host 'MNO' and the 'Service Provider' are seen to provide the service to the customer. This was sometimes confusing, and of little value-add to the customer, with the only differentiation coming in the shape of price and maybe some differentiated billing. In general however, the customer seems to prefer a single brand. The same is the case for the "powered by" model - the customer does not care  which MNO powered their MVNO, they have already chosen their "network". Hence Virgin Mobile being voted the best network every year in a row since launch in the UK. Similarly, there would be little value in the MVNE and MVNO brand being apparent to the customer.
©Copyright 2001-2005 Christian Borrman, All Rights Reserved. Reproduction Prohibited

Monday, 14 January 2013

failed MVNOs, MVNO myths, again, updated article

I thought I would update one of the most popular articles on my MVNO blog for a few years, now that MVNOs seem to be picking up again. The issues are the same, however with a bit more detail they are split out into 6 rather the 3 main points:

Not defining the MVNO product

Not defining the product properly is a key dependency of everything below: what are you selling, to whom, in what package, in which channels; moreover: Why can you do this cheaper than the MVNO and why can you keep this customer longer. So many people lose site of the fact that the bread and butter of MVNOs is acquiring the customer cheaper and keeping them for longer. once you have defined the product, you can do a business model that does not just read like "this guy has bought one of those MVNO business models off the internet and so goes straight to the bottom of our list". A well defined product will need and make way for a well defined word document defining everything, as well as an excel that is somewhere close to real, as much as possible obviously! This is critical to point 2) below as well, the MNO / MVNO relationship/agreement.

MNO MVNO relationship / agreement

Once you have easily got the MNOs attention by knowing point 1 above, defining the product, the negotiations will go a lot easier as you can focus on getting the right deal. There are so many people out there who are either a) so desperate to keep in favour with their old MNO employers/partners/etc. or b) the rogue  ex FD or wide boy who just negotiates and renegotiate every point that is in front of him until there is no goodwill left in the relationship and without any regard for whether this is a point that means £50,000 of revenue over 5 years or £50M...

The MNO / MVNO relationship is key, as when you launch, you will have some big competition, a big brother for the new kid in the playground is more useful that most people think... you do not want to be that kid whose big brother would happily see his annoying little brother's head flushed down the toilet...

You will also not get the agreement right at first: you will need some help to renegotiate after launch, if you have already negotiated this to death... this does not mean get a crap deal out of the MNO, this means get the right deal for the right model at the right time with the right MNO. If you have done point 1) above properly, you will have at least two MNOs to chose from and chose for more than just base rates! Think: Q: what would happen if I came to the MNO with....  Q: Can I work with these guys or will I be hating their guts at every meeting...

Choosing the wrong MVNO model / MVNE provider

I have put this here, even though it is part of point one, defining your product, as, your offers available may change your model choice during phase 2, the MNO/MVNO relationship. Having said that, do not let an MNO persuade you into a model that you believe is wrong just because they have a spare slot for that model... this is not just full, light or other MVNO: it goes as far as saying: do I need to be an MVNO at all or can I licence my "product" to the MNO wholesale team??? or even, in the case of the failed Disney Mobile, could this be done better via a content deal... Think about what Apple and blackberry did in certain markets. MNOs see so many MVNOs, and the wholesale team are bored silly of doing thee same old, stand out and ask for what you need, what you want from having done the points above, not just what is on the shelf.

MNO Legacy in MVNOs

never do anything just because it was the case in the last MNO, or MVNO for that matter. EasyMobile's CEO came straight from one of the greatest MVNO successes of all time: Telmore, but that was no guarantee for success. Online has gone from being sub 1% of sales in the already internet commerce friendly years of 2006 to now being serious double figures, SIM free sales are soaring, multi SIM ownership is increasing...

MVNO Execution. 

You have managed to get here, the "easy" part of your journey is over! You now have to sell! I have done due diligence on a few MVNOs and found all sorts of horrors that scuppered a deal:

  • SIMs in channels that cannot be recovered: the relationship soured, the model was broken, the systems were terrible, people got carried away, the MVNO gave thee SIM away for free... at the end of thee day, the MVNO lives by acquiring the customer cheaper and keeping them longer; wasted SIMs not only ruin/dilute/fudge the real figure, they can cost £100,000 or even £ millions and moreover destroy your brand. Think, if you have someone's SIM in your drawer for a year without putting it in a phone - what do you think of that brand? 
  • Partners / agreements that have to be used because you are tied into that provider
  • Scale/flexibility: you will most likely be much more successful than you anticipated if you got this far, however it is extremely unlikely it will be in the way you planned: do you get the stats, revise the marketing, reconcile the channels, reroute the stock, reorder the stock, etc. to ride that wave? Most MVNOs find out too late, have thee SIMs in the wrong channels (or not at all!) still spend marketing where its not working, etc...
  • start simple, easy to monitor, low/no fraud risk, low maintenance... drive that early advantage

MVNO Lifecyle

Read your technology books, or at least just Pip Coburn's change function; and remember - the needs of the people who buy your first product, to the ones who buy later to the mass market (if you are lucky) are all different, therefore your product will change, your marketing will change, your channels will change... therefore do not get obsessed with having the right handset or bundle to get X customer - your first customers will buy simple! you can add bundles for the me-too market!

Remember: acquire cheaper, keep for longer - with everything you do in MVNO!

The key MVNO myths:

  • MVNOs cost $50Million - no they don't; Virgin did, most was mass market ATL marketing, both the mass market MVNO (5% of country subs) and big ATL budget days are over, at least in technology
  • MVNOs need a handset - no they don't... do not have the time or space here....
  • Pre-pay is nasty Post pay is better- no it is not, Virgin mobile got to ma good few million customers with pre-pay and auto top up.
  • I cannot compete without a bundle - yes you can, MVNOs have sold per minute and per text in a bundle fuelled market, data will go the same way, you can get 40% of your customers and your first customers without a bundle: bad staff blame their tools!
Did I reiterate: acquire cheaper, keep for longer? :)

Original "Failed MVNO" article 2007 -:

Failed MVNOs
It is not hard to see why. In 2005 I was lured to head up the mobile arm of £12m start-up icom, which included a youth MVNO, however, the most common expression I would hear to my repeated youth MVNO business models and plans from the billionaire funder and financier in board meetings was “Bollocks!”. The only thing more annoying than being constantly black-balled, was of course, the horrible realisation that he was right. (Actually at the time his new bean counter who would just nod and agree with him but knew nothing and cared less about the whole idea was even more annoying... we called him “the nodding donkey”).
Youth MVNOs, as they have been rolled out, and as I would have rolled out, and as the mobile operators, handset manufacturers and marketers would have backed me up, do not work; the technical term for which is apparently “bollocks!”. The problem is that they are devised by people like ourselves, who are advanced users, for what we see as even more advanced users, which they are, which also means they know how to, and have the time to obtain this advanced usage we pay for, usually for free. Their spend is neither predictable nor regular. There are many youths with surprisingly high disposable income, however those £500 per month in the UK will sometimes have £50 to £500 spent on mobile one month, then just £5 the next when they renew their wardrobe or even less for 3 months when they are saving for a new scooter. Today’s 50mb on myspace data is nothing by the time you have launched a myspace service on your MVNO, because by then they will have moved on to face book, and so on.
Dot mobile going bust was no surprise really, as neither was...
Extreme mobile never got off the ground for the same reasons, i remember doing the due diligence for a VC looking to fund extreme; there was no fault in Damien Brady’s pitch, it was one of the best I have ever seen, its just the youth model is flawed.
While the youth market is seen as premium, as they have huge disposable income and are advanced users, as we can see in the mobile youth report, however, it is divided among too many pulls, with too many seasonal, weekly, fad based and just plain inexplicable variances upon which to base a x month business model. The only people who could make a go of this are the likes of Lebara and other low cost MVNOs that presently focus on communities, with a youth brand, they have the lean, mean base model to be able to withstand the ups and downs, they just do not have the brand... but that is where they are strong, as a branded youth MVNO is commercial suicide. You need a vanilla MVNO that lets them use whatever brand or service takes their fancy at the time.
It will be interesting, as there is definitely opportunity, and it will be interesting to see Blyks rise or fall, as a similar problem arises in terms of planning ads and campaigns that are devices months or years in advance, while making them relevant to a constantly shifting market. What can save the likes of Blyk, is the booming space in mobile web advertising, rather than the planned-for direct marketing.
But good luck to the bunch of thirty and forty-something, even twenty-somethings who think they can make a go of selling predictably or reliably to 14-24 year olds. I spent two years of my career doing it, did endless user experience sessions just for the mobile festival guides, let alone a mobile service, and learned in the process to be prepared, be surprised, and move quickly.
posted by Christian Borrman 21:36pm 19/11/06, updated 06:26 05/07/08
The most common failed MVNOs are those we never got to hear about! Many underestimate the undertaking that is an MVNO and how long it takes to get the model right, and the MVNO never makes it to market. Once launched, the second most common failures, in my opinion and 7 years experience in MVNOs, are caused by one of three things:
1) "Legacy" elements of the MNO excesses and MVNO forerunners; like expensive tariffs, cost based propositions, large cost bases like subsidies, flashing handsets on a small scale, or MVNOs based on the brand propositions of the past, like the Virgin Model of obtaining millions of customers when those days have well and truly passed, etc. etc. Many of these have been contributing factors to the recent demise of Disney Mobile UKESPN Mobile in the US and most recently Easy Mobile in the UK.
2) Failure to business model properly and negotiate terms that are based on the business model's ability rather than "instinct" or just trying to get the best deal out of the operator without knowing why or being honest with the host MNO.
3) Flexibility. Take three examples: 1) Virgin mobile business modelled to have 200,000 customers, by which time they had 2 million. Three planned to have 1 million users, by which time they had a few tens of thousands. If you were a betting person, you would have lost money on these numbers for sure! There have been too many MVNO models that lose money as they could not grow quickly enough and continued with MNO penalties, or they could not scale their funding or supply channel quickly enough to handle handset subsidies and shipment... Many of these are just outcomes of points 1) and 2) above.
For more information on why MVNOs fail and succeed, see Latest article RE: Why Europe's MVNO Sing