Monday 23 January 2012

Mobile Roaming Conference Chair's Digest 2011

Mobile Roaming 2011 Digest

The Mobile Roaming Conference was also a great event, and a very successful one too, with a packed schedule of presentations, and a great story built as the presentations moved through the day: starting with the issues, then following with some great case studies and then other strategies for maximising roaming revenue, and making roaming as efficient as possible, from centralising roaming to hubbing to wholesale as part of the roaming strategy... To boot the Hotel was great and the bar proved popular afterwards... so I hear, anyway :)

Roamaing Conference Overview

For those of you who just want the low down, in a few bullets:
  • It may be no surprise that volume is increasing as margins are decreasing...
  • Data is growing, VAS is growing, voice and SMS is shrinking, just like retail
  • Roaming and Wholesale are merging
  • We had a great presentation and case study on roaming segmentation which saw a 35% increase in usage, 21% increase in revenue and 13% increase in margin
  • EC Roaming regulations require huge amounts of caffeine to sit through... more below
  • The IPX is central to CDMA but not yet GSM VAS
  • Centralised group roaming departments are doing more group level agreements in a month that they previously did on a country level in a year!

Roaming Conference Presentations:

Here are the bullet point “highlights”:
  • As volumes increase but margins decrease things have to change: centralisation, segmentation, more attention to settlement, centralised negotiations by group volume and hubbing...
  • The bilateral "spaghetti" model is moving to a more centralised, hubbed "cannelloni" model (yes that second analogy was used).
  • Downsizing can just be migrating of smaller routes...
  • Data is growing and some interesting VAS were emerging, such a service specific, i.e. Facebook and Twitter daily bundles for example...
  • Data is still nowhere near as high as it should be as many just turn data roaming off as the smartphone takes grip, even so it is the growing trend: engaging the "sleeper roamer"! 
  • 40% of travellers do not roam at all...
  • Thank you messages work... why just AoC roaming welcome messages
  • There were a couple of differing views on the EC roaming regulation, especially round the single IMSI, single IMSI breakout or dual IMSI approach... to be honest it is quite clear to me who will go which way (MNOs, MVNOs and hubs), but there is plenty to debate here.
  • An interesting point of view was the fact that the breakout model will just drive global revenues to silicon valley, i.e. the Google mobile revenue fund and the Apple mobile revenue share fund
  • There is an inbound vs outbound and how bundles should or could make their way from retail into wholesale. We already see it (and very successful!) with some MNOs and MVNOs (we have enabled a few services via the Roaming Welcome message AoC so can see).
  • 15% of roaming traffic from one operator was identified as "honey moon" traffic... let's hope it was to elate on happiness and not seek council...
  • hubbing not only sees synergies in efficiency, but also revenue assurance!
  • MVNOs will drive hub adoption, especially with two month compliance for roaming access in EU roaming regulations
  • An analogy was likening the Roaming market to an aviation analogy: air miles, code sharing and alliances are the way forward... there is something in it, though I am not expecting a movie with George Clooney about mobile roaming points anytime soon...
  • Airline similarities continue obviously as roaming revenues track airline travel increase... and airline traffic is still growing
  • Wholesale is seen a key way to attract the 40% who do not roam at all as well as other "sleeper revenue", VAS is seen as way to get both wholesale and own roaming revenues up, the latter also cannot argue with the stats on segmentation (the former segments itself generally).

Tuesday 17 January 2012

MVNO Networking Paris Congress Chair Digest 2011

MVNO Networking Congress 2011 (November) Digest

The MVNO networking congress was a great event, and a very successful one too, just the week before Jayme contacted me to let me know I would be chairing 13 presentation instead of 8, so the schedule was “tight” to say the least!

The MVNO Conference Overview

For those of you who just want the low down, you can see some of the Twitter comments on your left, and my closing bullets were:
  • We have seen and continuing to see significant growth in MVNO, so far we have only touched the surface, even in the overcrowded ethnic and low costs space
  • MVNO churn is the lowest in pretty much every market
  • VAS are key: Data, payments, Social Networking, all generating more value, loyalty and even contributing to any MRG
  • Channels are expanding: social, online, new retail
  • MVNO growth is now starting in value, as well as size due to previous points

MVNO networking Conference 2012 Presentations:

The intro was pretty quick, I am not big on long intros of the conference of the speakers: speakers bios are so random in their content (we should have top trumps card in the audience if you want to check out bios that are structured instead of random details and regional quirks…) and I think the audience is there to see presentations, so don’t make them wait for presentations… on that note below is my summary, in order to not name names or other anti-social behaviour I do not list by presenter and company but by relevant info. As an Englishman I will no doubt have to engage in some hooliganism afterwards to make up for such sensible and neighbourly behaviour J.

MVNO Networking Conference “highlights”:

  • 6 million MVNO customers in France, 50% increase in 2010-2011
  • Churn is generally lower in MVNOs (3 sources, 2 continents)
  • Annual MVNO churn in France is sub 20% (annual!)
  • MVNO customers 14% of UK Market
  • “Wholesale is better than no-sale” Old KPN quote was reborn in a pres, good to see!
  • One non-full MVNO going full MVNO to have more control over VAS and data provisioning infrastructure as data becomes a key part of their differentiation and marketing strategy
  • Another non-full MVNO going full to be able to potentially leverage multiple hosts (not advised, so many MNVOs forget that their host is like their big brother in the playground – even if you do not like him and he may not even care much for you, but if you are on good terms, he can save you getting a wedgie or a swirlie) i.e. you will generally get more from an engaged single MNO than you would ever get by trying to trade MNOs off against each other. This is the case even at initial negotiation stage.
  • On this note we had an MNO likening the MVNO to a clown fish and the operator to the sea anemone, with one protecting the other from the rest of the creatures (sharks) in the sea… This MNO is actively seeking clownfish!
  • The MNO used to use the MVNE as a filter, now more flexible and used as a solution
  • La Poste has 2.2 Million customers in Italy, looking to move to full MVNO due to scale, it is a “buy” vs. “make” strategy.
  • La Poste MVNO have the lowest churn in Italy.
  • 50% of La Poste customers have made a mobile payments transaction via the card linked with the mobile account.
  • Colruyt supermarket MVNO launched in Belgium, a la Tesco Mobile model: the key is a line from the music industry “once a hit, always a hit” if a model has been successful in one country, it is likely to do the same in another, again and again.
  • MVNOs managed to make a “per min” and “per message” business back in a “bundle” market space, they are doing the same in data, charging a premium in “per meg” data. In Denmark the main MVNO is doing this at a premium of 2.5x market rate.
  • Online is the key channel to avoid “shelf overload”. The customer now has so much choice in the typical retail establishments. Telmore has reached 800,000 subscribers in Denmark (over 12% of Danish market in just one MVNO) mostly via online.
  • If not online, other innovative channels are required, especially in places like the Austrian market, where €10 gets you 1000 mins and 1000 SMS, an MVNO has to do more than just traditional channels.
  • Social Networking is becoming a key differentiator
  • Some interesting comments on the EC Roaming regulation (its all relative, they were interesting as roaming regulation comments, but not interesting enough for a blog!) but if someone is interested enough I can dig them out...

Thursday 12 January 2012

... the main MVNO page archive ...

MVNO blog has moved!

below is the rest of the original blog main page archive, I shall be moving the old blog over shortly, so apologies if any of the links fail while this happens, but please comment if you do find a broken link and I will try and fix it as soon as possible:

There has never been a better time for the MVNO

The MVNO has had its set backs (see my failed MVNOs page) however the conditions have never been better time for MVNOs; with MNOs clearly wishing to capitalise on the opportunity, mobile saturation to the point that a new service provider will attract significant potential customers (i.e. competitors' churn), and many other factors assisting the process. There are still pitfalls, however, the main one is competing with an MNO on MNO's terms by offering all you can eat bundles and expensive customer acquisition processes which will see the MVNO's cost per gross added customer soar: The key to an successful MVNO, and moreover a successful MNO-MVNO relationship, is to attract a customer cheaper and keep a customer longer... there are a couple of existing and an emerging MVNO that look close to entering the page linked to at the top of this paragraph - only time will tell!

posted by Christian Borrman 06:26pm 04/05/10

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 and on device portal MVNO, read more

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

The MVNO has been and continues to be a slow beast. One MVNO model that is heavily overdue is the Dell MVNO, having already ventured into deals with carphone warehouse and Vodafone for laptops with mobile or fixed broadband, the onslaught of the new sub £300 laptops is making read more

posted by Christian Borrman 11:26am 24/11/08

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!”. read more MVNO failures

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, and many of these have either already been sunk, written off or are ... read full article

One of the key issues of Tesco when first negotiating their MVNO when I was at Mason Analysis, was that the host MNO needed a certain level of success and takeup for the then MNO investment in the MVNO (there were no MVNEs at the time) however, if the MVNO became too successful, it could prove a burden on the host network. Convergence is a simple way to... read more

posted by Christian Borrman 13:23am 28/05/08

More MVNO failures
Dotmobile has been added to the long list of MVNO failures. It was not hard, when I was lured to join Social networking web start-up icom, my first task was to set-up a youth MVNO. "Boll**ks" was the response from the billionaire investor to my first draft that the industry and my peers were lapping up for a youth MVNO. The truth is... read more

posted by Christian Borrman 11:26pm 28/03/08
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, and many of these have either already been sunk, written off or are ... read full article

originally posted by Christian Borrman 11:26am 25/09/07
... the artcile in Businees Week, Why Europe's Mobile Startups Sing ... is 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 ... read full article

originally posted by Christian Borrman 11:26am 25/09/07
I have received an email from Pyramid with this title. It is amazing ... just 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 the old MVNO model in 2004 when I began writing the report, nor was there in 2005 when it was published; even less so today. Today's MVNO is a much leaner ... read full article

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

MVNO in a Box

MVNO in a box

Readmade MVNO, by ACME

The MVNO in a box has changed, so what has changed? Well, the starting point, not the end point: there are MVNAs now that start at €1,000, ok you still need to market the product, pack the SIMs, distribute them and more, but it's still a low starting point and this is important: you are not necessarily going to carry on and expand with this solution, but the starting point is low enough for more to come through, refine the service and the product, learn a bit more about mobile, etc before then going back to the MVNE or MNO table with a refined plan and some actual numbers. This is important for four key factors:
  1. Fewer MVNOs failing to ever get to market or going bust getting there
  2. Better services: there are people who know services and there are people who know mobile, that canyon is very seldom bridged, zip wired, and sometimes not even crossed!
  3. possibility of funding: the amount of potential MVNOs I and the MNOs speak to that are looking for funding is huge: huge because there are many, and huge because they very, very seldom get funded as you have half of the funders fed crap from people who pretend to know MVNOs saying they cost £5-10 million, and those that do understand just will not take the MVNE/MNO risk or stomach the unkowns through due diligence: a small going concern is differnt
  4. they will stop people competing on price: so many MVNOs start with a value proposition, and a conviction that the MVNO will take 6-12 months less time that it actually does... 6-12 months later they tend to descope services to launch quicker and the first to go are the Value Added Services... and so they compete on price. One thing is clear - a €1,000 MVNA is not going to permit you the lazy luxury (lazy as competing on price is just the most expensive marketing and product development you can do) to sell on price - you are going to have to sell on service. There are also fewer SIMs, so you are not going to waste them: this means making sure you charge for a SIM, only sell it to someone who wants it and sell it at a profit... All failed MVNOs that did not fail because they were silly ideas or other high risks fail by a) cutting VAS, b) giving away SIMs, c) selling on price.


The end point is still the same: use your MVNO in a box if it allows you to prove a live concept with the same budget you were previously going to use to explore or prove a concept with (research, reports, etc). Then take a refined trial service and apply the below logic from my post of last year to an MVNE / MNO proposition, which if good, will not come "in a box" but will need some hard work, but it will be hard work you will find the MNO or MVNE very willing to help you with!

Original MVNO in a box article 2011

I have just been through the MVNO Industry Summit Linkedin group and been on a rant! Why? The first was someone asking if anyone if anybody had an MVNO in a box solution. OK: the MVNO has come a long way, the first one took several years, and to be honest, my shortest engagement on an MVNO has been 6 month, and that is when I have joined at least double that time into the process, and I have managed to accelerate the process by at least 4-5 months. MVNOs, along with app stores, are the single most complex products you can launch in mobile, and the technical parts working are just the start. Forget "in a box" and think, what is my box that I will tick in the market. At present, if you look at the mobile consumer as a whole, probably only 5% to 10% of mobile consumers could actually buy a product "in a box" The most part buy a mix of device matched with an almost bespoke tariff, term, contract and other extras, bolt-ons and more, let's not even begin with accessories, ring-tones and the like. Therefore, if you want an "MVNO in a box" think more about if your product that is simple and relevant enough that i would enable a significant market of consumers to buy your product "out of the box". you will then be of enough interest to the market and an MNO that your "mvno solution in a box" worries will practically go away!

originally posted by Christian Borrman 18:50pm 04/03/11

MVNO Opportunities

So what has changed since nearly a year ago of speaking to MNOs, MVNOs and MVNEs as well as  two major MVNO conferences? 

The opportunities are there, in the existing form, as per below post and thread on Linkedin, moreover, we have only just scratched the surface of the MVNO to date: we are still only in the "value stage" of wholesale: If you like, we are somewhere in between when Marks and Spencer used to sell everything for 1p on a market stall and when Tesco used to be the "pile them high" almost warehouse experience - 

The "St. Michael" and "taste the difference" is the opportunity from what we have done so far, and this means existing brands and new MVNOs entering the same space but moving further up the value chain with VAS as the Androids and other smartphones take hold of even MVNO handset databases.

The other opportunities are equally interesting at this happens: 
  • Higher end MVNOs - remember Fortnum and Mason predate any of the other wholesale analogies relevant to mobile! Also the Vertu and American Express Black example below
  • More niche MVNOs and MVNEs and MVNAs - the present MNO direct or MVNE model has been awkward for niches, but we are seeing that finally change with lowest end MVNAs offering services from €1,000 set-up to prove a concept or test the water or even refine a service, and even MVNOs setting up without a web page but just a social network page to attract customers...
  • Technology MVNOs: iPads, Garmins, TomToms, Galaxy Pads, Playstations, etc, etc could all benefit from SIMs that can serve their needs, not those of 99% of the SIMs to date where the service has been shaped around lots of calls, some texts and a bit of data slapped on as an afterthought
  • Service based MVNOs: Vertu, American Express, black cards, private banking... with host MNO o2 getting the public Wi-Fi for the lucrative Westminster, Kensington and Chelsea markets, beating Sky and Virgin Media to the post, these are the kind of opportunities... 
Forgive the UK specific examples, but this is where it all kicked off and is my market where I am better places to assess the opportunities, and speak to the MNOs, MVNEs and MVNAs on a weekly basis and discuss these matters, but there are applicable to the ROW

Below post originally posted by Christian Borrman 28:50pm 08/03/11

My other rant from the linkedin MVNO Industry summit group discussion board (see other below) is defining MVNO opportunities and being honest about the opportunity. There are simplified MVNO dichotomy is that the MVNO pipeline is full of either:
a) big brands, with distribution, but no defined / differentiated product to set it aside from the MNO, which already has a brand and a non-differentiated product thank-you very much
b) the great ideas that do not have the distribution, and even then, cannot focus their product enough around the opportunity.
This is outside those that are MVNO in a box potential, who also grossly underestimate the term "in a box" to mean mvno=easy... and then forget to differentiate and simplify the product...
... the rant was sparked about people talking about the power of mobile to bring customers to a supermarket, and how mobile can supplement their database: supermarkets have an age-old ability to bring customers in, its called the threshold or catchment area of poor buggers who have no alternative if they want to eat... and supermarkets know more about their customers than it is probably better to be aware of if you are of the pelican brief persuasion!

originally posted by Christian Borrman 28:50pm 08/03/11