Keep calm and #mvno_

That's all I have to say...

... wise words ...

Solavei and Radioshack interesting new MVNO business models and next big MVNO

Some big occurrences in MVNO land recently:

1. Over the weekend we had Solavei surfacing as live
2. Over the holidays a new data MVNO Radioshack emerged
3. We are working on the next big MVNO model :)

So, firstly up with Solavei, not only a new model, but also covered in Engadget and Allthingsd shows how mainstream MVNO is no becoming, in fact Engadget at least have been tracking the tag MVNO for nearly two years now.

Sadly Radioshack mobile was not about live tracking of their team... 

Radioshack makes a lot of sense as well, and begs the question why the likes of Maplin in the UK are not doing the same: the Maplin MVNO as per the Radioshack data MVNO, make a lot of sense for the sellers of hardware. There was a lot of speculation and leaks prior to launch,  as I had a suspicion they had done it just to enable team HTC style real live stats on races, which at the moment only Levi is doing as part of an association with mapmyride. Another equivalent in the UK/Europe would be Expansys, who rode the wave of mobile phone and gadget online growth from the middle of last decade, however at the time the MVNO model was not really ready for the MVNO, nor I suspect were the VC backers (I still have certain VCs throwing curve balls into MVNO discussions that they are adamant that MVNOs costs tens of millions of $ zzz...) wanting to invest in the MVNO model. VCs do not like investing in things they do not get 100%, and let's face it, not many people get MVNOs 100%, however in their defense, MNOs do not make VC investment easy with woolly clauses around assignment and commitments and ownership of customers, etc that restrict the sale value of any MVNO.

So back to the interesting models. Solavei are running an incentive scheme that we will all be watching very closely; both the fully inclusive model and the incentive to sign on other customers could be interesting, as long as the potential fraud elements are contained.

Radioshack is very interesting as, now online sales are prevalent in mobile, it levels the playing field somewhat for big brands like Radioshack, and the MNOs would be wise to jump on this one and engage these brands.

In terms of the interesting models we are working on, well you will have to wait and see! In the meantime, it is both great to see Engadget tagging MVNO as well as the likes of Allthingsd reporting on these developments, as it is refreshing to see the "next big things" coming through as MVNOs finally move out of "brands, supermarkets and ethnic". Even more interestingly, a lot of these will se the rise of MVNEs, at least in Europe where the direct MVNO roadmaps are congested to say the least...

Finally, we move onto the old topic of MVNO Marketing with Solavei being very refreshing indeed; in addition to the name sounding like Esperanto for "go solar" the marketing elements is definitely strong, as it the fact that Radioshack's core market may have been niche, everybody know's it via sponsoring cycling, just as the Sky brand is no enjoying a resurgence on the back of its Tour win, and announcing an MVNO is a not only a great way to advertise your mobile offering, but also the fact that Radioshack now sell more to more people, not just electronics kit's to the market that were the inspiration for the film "40 year old virgin".

So I leave you with my thoughts on MVNO marketing plans, a very popular thread that was reblogged by Prepaid MVNO among others, and an equally popular thread on personal brand MVNO. If you want to get these articles as they come, you can follow MVNO on Facebook, MVNO on Twitter or download our MVNO app and MVNO web app.

LTE data MVNO and wholesale LTE

LTE MVNO

I get asked a lot about LTE and the MVNO, and well be speaking about it and chairing a panel on it at the 2013 MVNO conference. Imust get asked about LTE and MVNO as much as I get asked about LTE and mobile apps if not more, and given that apps is a much, much bigger industry, well then it must be a big question!

Like many "MNO things" in MVNO, if you apply them without any thought, i.e. in what we will call a legacy manner, again, it will be your quickest route to MVNO failure, as you will just be selling what a bigger version of you is selling and spending more on marketing on and has bigger margins on so can squeeze you. However, I also get bored silly at conferences and meetings on LTE and the MVNO and how LTE will impact the market in general, and the main reason is that a lot of people are applying the same old principles as they did last time and the fundamental mistake:

Technology does not solve problems; it presents opportunities that can solve problems, but then this solution comes with its own set of problems, like everything in life...

The Fundamental mistake in terms of an MVNO is the fact that most MVNOs are still not leveraging 3G or even 2G data, how is evolution going to make a difference: the answer is manifold and varies depending on where we are talking about and the market there:

• In general: in general the only difference could be that hopefully LTE will make the MNOs a little more open to discuss data propositions for the MVNO. At present, MNOs, even the good ones, tend to have a mental seizure with data, as they expect the MVNO to assume the risk of arbitrage. MVNOs in turn, then have a similar level of mental breakdown when they insist they need bundles... when in fact they can get on selling at least 30% to 50% of the data they can sell by simply selling data to the 50% of the market that use under 100mb of data per month as I mentioned in a recent post and not worry their MNO with potential capacity strains that cause their MNO mental seizure in the first place. The reality here is that the MNOs should stop flat rating data that causes this issues in the first place, however they will not for fear of churn, or if they all do it price collusion, so LTE may well be the catalyst that spurs proper MNO data pricing that does not let 5% of the data leeching users ruin the experience and business models of the rest of the world!
• US market. Here LTE will be different, in that the CDMA players will finally have a play in the multimedia IMS space and a much more equal pegging that the two tier wholesale market at present, where the CDMA wholesale rate reflects the lower desirability of end users and business over GSM based solutions. We can expect the LTE players to be able to launch more, and more exciting MVNOs with LTE
• Data SIM usage. I have been saying for a long time (5-10) years that there will be a rise of SIM usage and that the MNO will not want to, let alone be able to fulfil all of these opportunities themselves. Indeed, if they do not, many of them will find less appealing alternatives that cut out the MNO all together. An example is GPS, at present people either tether to their phone when they can be bothered for probably 5% of journeys, or download off-line or even use a dongle: in essence, the MNO is making nothing here as this data will inevitably be an unseen blimp on a flat rate data tariff, or an extra 2mb twice a year on a standard tariff, or at worse be by-passed altogether (download via ISP). if they do a deal with an MVNO that manages these SIMs (maybe 1,000,000 SIMs to an HLR and low QoS, latency, etc that these devices will work fine with, vs. high availability, fully loaded generic SIMs or even MNO M2M SIMs which are still engineered towards an average scenario and over engineered quality that IBM requires, not what Joe Blogs wants for his 10 different devices....) the user will happily pay Tom Tom or Garmin £5 per month for the SIM and some other services they bundle, like auto updates, being able to track where you have been on a website, and even pay another £5 per month for the data; for every journey. This could be £2-5 per month incremental revenue for every TomTom or Garmin in car navigation device sold. As, I believe KPN coined the phrase; "wholesale is better than no sale". at present 95% of PAID mobile data solutions go unfulfilled... (I have run some numbers for this based on business models that have not made it, vs. the whole of business models I have put to market, and the lack of extra data sold on those that did go to market - its shocking!)
• M2M, as above, M2M has been engineered to the early adopter solutions that were defined by consultancies and technologists to cater for the first proposals, like tracking shipping containers around the world. Without going into details, the MNO is geared presently around small amounts of data over long periods of time and usually extended or wide spread distances. There are many other niche opportunities that have been aching to get to market, but have not been on thee in-house radar. All LTE will add, I hope, here is the ability for a two tier model of large local bandwidth and widespread lower bandwidth, which is not catered for at the moment without using wi-fi for the high bandwidth. While this may seem like a solution, if you think getting mobile coverage in your home, office and other locations is hard, try covering whole company locations and warehouses with wi-fi and integrating it with thee mobile network: there are many who will say its easy, and they are either lying or have never had to project manage the mess they designed! an all-mobile solution for this will be a game changer, assuming it changes the mind-set

The worst part? that the first and the second two could be done now, just that LTE will change the way a) people perceive data at the wholesale level, and b) will drive MNOs to drive usage and so we will see the business plans that were possible technically 5-10 years ago, finally be enabled, not by a technology, but by the circumstances that the arrival of a new technology has created.

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

VAS, Facebook and the MVNO continued...

VAS MVNO, Facebook MVNO

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

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

emerging market MVNOs and spare capacity

Emerging Market MVNO markets 

An interesting comment on the MVNO explained page posted such an interesting question I have decided to post about it in its own right:

"Hello, thanks for your insight on MVNO. very insightful. However, my country has refused to license MVNO operations. i have held presentations, sent them documents, written articles, directed them to the PrepaidMVNO website and even invited them to the MVNO summits. Their major concern is network congestion on the host MNO. service quality has been quite...actually really bad, the quality of mobile phone services are bad and the logic is that the networks have taken more subscribers and thus more traffic than their networks can handle, so introducing MVNO's may add pressure the their networks and further reduce service quality on the networks. i have argued against this logic without success. what will you say to this."

This raises a number of issues that I have seen come and go over the years in MVNO, and now coming again. Essentially, congestion/capacity was the key concern of the first UK MNOs prior to launching the first MVNOs, but their workaround was a commercial one, which is always encouraged, as can be seen in the financial results of MNOs supporting MVNOs!

Emerging market MVNO struggle

The thinking behind blocking MVNOs on this basis is flawed and obviously one arising from lobbying by people who have not taken the time to examine the facts, let alone the finances, which make MVNOs a no-brainer. However, in this same way, there are well documented cases of how  many US carriers fought and lobbied the US government for 10 years to stall the progress of the internet, a product which now forms the biggest part of their bottom line and dominates the product sections of their websites...

So, let's deal with the points one by one:

1. No network runs at full capacity all the time, like every and any service, there are peaks and troughs, and no two networks in the same country have the same profiles either. 
2. These peaks and troughs are very significant in both MNOs and MVNOs alike, with their networks running at eighty-some or ninety-some percent at peaks for a short period of the day, but typically at anything between 30-50% during the day, and obviously pretty much 0% all night.
3. No two networks in the same country have the same load profiles, in operators I have seen over the years across many countries have very different profiles due to having attracted a very different customer base. 
4. network capacity varies geographically as well
5. some types off traffic are more consuming of resources than others, for example now data makes up 80%+ of MNO network costs, but does not make anywhere near that percentage contribution in revenue or profits...
6. As data requirements and mobile penetration expand, if the MNO cannot even handle voice and SMS now, how are they going to tackle data and provide the country with the infrastructure it needs to grow??? If they are tackling this issue properly, voice and SMS capacity for MVNOs should not be a problem...
7. Some MNOs state that they run a very efficient network and therefore are not actively looking for MVNOs however, they do still run some pretty major MVNOs, they are just more selective and chose ones that complement their profile

MVNO African Story

At the time of the original article (2012) and this update (2013) there key barrier example used in Africa is "network capacity" as per above example. I shall be brief:

In short:  if a network were running at full capacity all the time, it would not just be congested as per the argument against MVNOs, but the network would actually fall over and cause major outages for long periods from a functional perspective. Furthermore the operator would surely be falling short of the service/coverage commitments they will have made to get a licence and become an operator in the first place, and certainly will not be able to cope with the data expansion that is needed for a country to grow in this internet age: Whoever is upholding full capacity as a barrier to MVNOs is either conspiring with a short-sighted MNO or MNOs, or having the wool pulled over their eyes by a short-sighted MNO(s)!

MVNO Latin American Emerging markets

There was a great presentation at the MVNO Conference just recently in Barcelona on the Mexican Market and how they managed to get the regulator to open up the market, basically by creating a group, and ringing the regulator and government departments every single day, among other things, very interesting, and good luck; however, I will end on three notes:

1.  you need to arm yourself with facts and show that these arguments have no substance at the same time
2. you can use the cases of the Spanish and Italian markets, which needed the regulator to open the market in 2006/2007, some of the last markets to adapt MVNOs which opened the floodgate for MVNOs
3. There is nothing like some prospects to get the market going... post Virgin mobile UK, every man and his dog approached t-mobile UK (then one2one) with an idea on a napkin to become an MVNO, most of them had no clue... if there is an opportunity, or many smaller opportunities that actually address a market the MNO is not addressing, then this helps as well.

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Ad funded mvno business model and the MVNO industry summit

Ad funded MVNO 

As the MVNO summit is just around the corner; a question that is often asked and/or a comment often made in MVNO conferences is:

• will MVNO business model X work in Y country/market, or
• X MVNO business failed so that MVNO model does not work... 

Is the ad-funded MVNO model still viable?

The ad -funded model is one of them, and as such has been part of my new blogs and old legacy MVNO blog for a while and can be found here: MVNO business models. You then of course have the other end of the scale, usually those who argues against MVNOs from the beginning and have now had to swallow their words as MVNOs make bigger and bigger percentages of MNO bottom lines: people who say that MVNOs as a whole  don't work when one happens to fail! Back on the more moderate heckler  let's deal with One of the most frequent is that, if Blyk failed then the ad funded model does not work... This is just plain wrong on a few levels:

1. 50% of all new businesses fail. In this respect, MVNOs are probably one of the best businesses you can invest in, as the failure rate is actually in single % figures in most countries over time. It has been higher, for example in France at first, when the regulator forced MVNOs, the result was that the network operator agreements were so restrictive that they strangled the first MVNOs... however they were all absorbed by the host MNO, so you could argue it was intentional: if they were proper failures the MNO would have set them out to dry rather than absorbing them. Blyk was also absorbed by its MNO - an MNO has full visibility of an MVNOs activities and potential, and they do not flog a dead horse!
2. The "ad" is very generic. If you look at the add business over the last few years you will see most of the traditional spend has all but disappeared and been replaced with display ads, Blyk started with a model based on ads that suddenly went into decline.
3. Mobile advertising is still in its infancy, it has been for 5 years, however this is now changing

Will the Brand MVNO, supermarket MVNO model, etc work in my country? 

In short, what does this mean? well it means that there has never been a better time to launch an ad funded business, as long as you are choosing the right type of ads, when to send them and, like any business, are careful how you spend and manage cash flow.

So, with the biggest MVNO summit to date, now extended to three days, let's make the MVNO Summit about where and how we are moving models like the ad funded model; add funded voice, data and SMS/MMS, to market in new countries, and maybe even take part in the MVNO challenge...

I will be adding to this list over the coming months, feel free to comment, like the  MVNO Facebook page, MVNO Google+ page or follow @MVNO_ on Twitter if you want to be notified of these updates