Showing posts with label Data and MVNOs. Show all posts
Showing posts with label Data and MVNOs. Show all posts

Friday, 22 April 2016

MVNO World Congress 2015 Pre Conference Workshop Part 2 - MVNO Data


Following up on the post 2016 MVNO World Congress  on the 2015 pre conference workshop, we have part 2, following Part 1 Mobile Marketing
Data is hard for MVNOs to sell effectively, as there are many hurdles, but good loyalty and revenue rewards those that do.
The biggest hurdle for any new MVNO is overcoming the same issue of the previous section on marketing: its the schizophrenic frankenstein approach. 
Your data package will vary if you are pre-pay, postpay or with an MVNO on MNO
The reality is that data bundles vary substantially if you are with an MNO, MVNO, prepaid or postpaid, and as such an MVNO data should vary. In reality, most pre-pay and MVNO customer s I have access to data for, use a lot less data than their postpaid counterparts, and there is a reason for this: if you are being charged for more data than you use, you will tend to learn to "abuse" data, whereas is you pay for what you use you tend to be more frugal.
Don't do it!

The is also a strange dichotomy whereby while mobile data requirements are going up on the one hand, wifi offload, wifi coverage, wifi speed and availability is also going up and giving way to "snacking" whereby frugal, light and moderate use of pay for what you use data at a premium price, can still be cheaper than "supersize" bundles that are throttled at some point anyway.

The second big issue for MVNOs is data configuration. We have been doing OTA APN data configuration specifically for MVNOs longer than anybody at Virtuser and know the pitfalls, especially when i comes to user experience, as we started out enabling apps for Nokia with their PR and Marketing agencies in 2006, and it was critical that the user experience was right.
Get the user experience for data for MVNOs wrong and it will be a disaster no matter what the bundle, package or need!
You need to get data working in as few clicks possible, and with a uniform as possible experience across all devices to a) keep customers, and b) minimise failures, but most of all c) minimise customer support; which is both a cost and a terrible customer experience in one.
Too many steps to configure data means too many points for failure, terrible customer experience and an unhappy customer
Above is the experience of the same ex MVNO with one service, and below with another... guess which one is ours and which is more effective :)
Simple data configuration is key to an MVNO
Apart from a bit of a plug of a service we spent 5 years developing to get right, the key is to remember than MNOs have this done automatically and so you, and an MVNO, are already starting with a disadvantage in terms of pain of adoption: keep it simple and get it right...

On top of this I would add the element of looking at wifi to complement your business, as the MNOs have done as well. In the long run it will keep your MNO happy, as:
  1.  you do not want to have the discussion with your MNO at the monthly operational meeting where X% of the MNO's network data hoggers are on your MVNO: just trust me on this one!
  2. keep the network, service and price for people prepared to pay for what they use and you are able to allow them to get what they pay for, which keeps the pressure on cost down.
  3. nothing is more "cannibalising" to an MNO than points 1. and 2. above!
  4. data can have the highest utilisation of any bundles if you get the product / price / positioning wrong
I have not covered all the points of the workshop, but a quick resume of other points are
  1. Have an app for data usage, as well as other usage, which shows actual usage and value and gains trust
  2. Never, ever, offer a throttled service: if you need an asterisk and footnotes, don't sell it
  3. Make the rest of the customer experience easy. An MNO has unlimited bundles that need limiting. There are however a lot of customers out there that are happy to pay for the data they use, as long as it is not throttled, and MVNOs can often end up with some very lucrative high end users.
A final addition is the one of eSIMs, which was presented in the 2016 MVNO World Conference the day I chaired this year. eSIMs are in many devices now, such as iPads and soon rumoured iPhones, and a host of devices coming out soon. You will also need to be able to SIM OTA, which you can do with advanced MVNEs such as the one I built  but not many do; which means yet another service to integrate, pay for, another relationship to managed, etc. etc.

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

Monday, 21 May 2012

VAS, Facebook and the MVNO continued...


As many of you will know, I feel quite passionately about VAS and the MVNO. This is not just an obsession, its just a realisation that any good business needs a tie-in, a value-add, a "something" that means it does not sell on price alone, and so when a newer, shinier competitor comes along, in order of preference the customer goes:
  1. ah, but, does shiny new things do, this? no, thought not - high value - major competitive advantage
  2. I would have to change the way I do all my...(insert VAS here) to work with the new service, medium value - useful advantage
  3. I would have to update all my details, low value - would just be a pain to move, like moving bank account or electricity provider
The problem is, most MVNOs, and even some MNOs are not even on point 3 level of VAS.

So why not? well there is a list of reasons why from a legacy perspective this was the case, however things are changing

The usual ways to leverage data was content, content, content. were an expensive portal, streaming video, etc, etc. These days are gone, and the proof is the above. Indeed the days were never there, the amount of conferences I have chaired, attended and spoken at where "content" was the supposed issue, and all I could say was, customers have content: its emails (blackberry proved this to be the case!) and the web in general, but on the mobile. 

Facebook is driving MVNO

The proof is hand is this article: showing that facebook access from mobile has now surpassed computer access. I am honestly not surprised. In fact, in app development focus groups even 3 years back, we saw that a good mobile app, like only apple had at the time (an app that did not look like a mobile web browser, allowed upload of images and push notifications, chat) managed to completely shift usage of Facebook from computer to mobile, while more basic ones and now the very good mobile web experience manage to take a good deal of it.

The reasons for this are multiple, 
  • many people do not have access to unrestricted internet access or facebook at work
  • most of those who do would rather not be seen using facebook at work
  • using Facebook on a PC raises probably more privacy issues as computers tend to be shared more and have more browsing history that people may not want plundering so facebook can make more advertising revenue
  • the key one however is convenience, Facebook, and indeed our digital lives, are now round the clock, constant streams of info, updates, feeds, chats and more: mobile just suits this better, whether its from a web browser or an app

VAS is driving MVNO data

In fact, everything that is driving MNO data, is driving MVNO data, unless as an MVNO you make data difficult, like by not having the world's most advanced OTA data APN settings :).

The key is, with it being so simple to get this working, why are so many MVNOs still rendering themselves as a low value, sim-swapping bitpipe when all they need to do is get APN settings set-up, and some simple data tariffs. As we have seen, most users are using less than 100mb per month anyway as per my previous article on this blog, and as per my blog on Apps and App stores showing that even the most basic MVNO type handsets that many MVNOs perceive their user base is using, which means MVNOs can still be very competitive with the average data prices I am seeing while negotiating MVNO agreements (at least the prices I have seen in the last 3-5 years) and/or ones that could be easily and quickly agreed with an MVNO if approached with a plan around social networking, rather than the usual "I need cheaper prices" routine :)

If you like this article, please like us on facebook/mvnos or follow us / +1 on Google+ and of course follow us on twitter @MVNO_ 

If you want to discuss how you can enable data revenues for your MVNO or MNO wholesale department then use the contactify link at the top right of this page and get in touch

Thursday, 10 May 2012

Data and MVNOs - what are they waiting for?

An interesting piece of research has confirmed something I have suspected and seen from wroking with MNOs and MVNOs over the years: a lot of smartphones don't actually use that much data, in fact 49% of smartphones in the UK use less than 100mb... This is roughly in line with operators' claims that 5% of users are hogging around 80-90% of the data usage, the rest (the difference between the 49% and the 5%) will be closer to the 100mb than the 1gb cap, in general. Over the last 5 years, from Nokia N95 to androids to iphones, I have averaged 176mb per month of mobile network data. The amount offloaded over wi-fi obviously higher, and there are occasional spats, moving house, etc where I have gone over that significantly.

So what does this mean for MVNOs and MNOs? Well, for a starts, MVNOs should stop whining about wholesale data prices and get on with selling data. even at 10p per mb, 49% of UK mobile phone users would be no better or no worse off paying GBP 0.10p per megabyte than the typical £10 per month "unlimited" data bundles they are using nowhere near the Fair usage policy. 

Does this mean everybody should move to an MVNO? No, most people, including myself, are quite happy paying £10 per month for unlimited data, knowing that I will pay the same if I use 85mb because I worked at home most of the month or 500mb because I was on a client site most of the month with no wi-fi to offload to... There were even more frustrating occasions when moving home once and my ISP messed up the installation of cable internet at the new property, I had gone past my 1bg fair use and as such my available bandwidth had been throttled back to a snails pace, however I could not pay my mobile operator another £10 in that same month for another gb of data at the usual high speed - this is nuts!

What does it mean to MNOs? Well, data has been documented by many as 80% of network costs, but its not 80% of network revenues, in fact its not even close, and that is no doubt before factoring in a handset subsidy of a brand new and reliably expensive smartphone. Most of these costs arise from the increased cost of backhaul and the ability of data hoggers to render this expensive backhaul useless, combined with an overwhelming need to satisfy various parties that the investment was necessary and that they have all the data users replacing the decline in voice and SMS revenues, even though the latter is still clearly the bulk of revenues... all very complicated, and unlikely that anybody within the MNOs will break this status quo. 

But my example of 85mb vs 500mb shows that its not just the data hoggers that are the problem, how do you plan to provision data for 10 to 20 million customers whose demand varies so much without huge data network running costs? Well the answer is to a model that matches usage with payment a bit closer. If I wanted to, I could offload most of that 500mb data from a month in an office with "no wifi" onto my laptop or actually define that "no wifi" meant there was wifi in that office, however it may involve me accepting a landing page every so often, or signing into a hotspot a few times per day: I would do that if my tariff matched my usage a bit more closely. As it is it is easier to switch off wifi in that office and let the MNO take that strain... 

When we finally match data a bit more closely to usage, MNOs can plan their network more effectively, they will cost significantly less than 80% of costs, revenues will go up and customers will stop complaining that data does not work, as the data hoggers will be weaned off and people will be using mobile data when they need it. More importantly, MNOs will finally be able to discuss MNO data requirements in earnest.

What we do know, is that the yield on mobile data in MNOs at the moment is much much lower than 10p per mb, at least in the UK and other territories where there is a data "land grab", and this data yield involves a marketing cost, often a very expensive (and complex and fickle one) of subsidising a smartphone, whereas the MVNO can sell a lot off this data at between 5p to 10p per mb very easily, whilst bearing the marketing and other customer costs and most of the general admin costs, while still yielding higher data revenue... And at the same time start breaking the "flat tariff" status quo madness and move to a pricing model that let's MNOs raise their own data yields and plan their network more effectively.

What does the customer gets? mobile data that works when you need it to, no matter what you pay...

And finally, to wrap up, I would advise any MVNO to get out there and sell data, by the mb, not by the bundle, people want data however you have to help them: 
  • you need to have at least the basics of getting them to mobile friendly versions of the data they want to access
  • you may want to let customers know when they have used  a given amount of data
We have done this by enabling data successfully for many MVNOs and once you have done this then you have the knowledge of your user base to be able to plan data marketing over the next few months and have a sensible conversation with the MNO about data pricing and bundles... its not rocket science, its what MVNOs have managed to do with voice (charge per min in a bundle environment) and SMS (charge per SMS in bundle environment) because there is a significant part of the population out there who want to budget their usage across data as well as voice and SMS and already have a shiny smartphone thank you very much...

If you like this article, please like us on facebook/mvnos or follow us / +1 on Google+ and of course follow us on twitter @MVNO_ 

If you want to discuss how you can enable data revenues for your MVNO or MNO wholesale department then use the contactify link at the top right of this page and get in touch