VAS or Value Added Services were once the darling of planet MNO mobile operator, to some extend they still are, only now we seem to have forgotten all the original VAS and just focus on the new ones like app stores. Then along came the MVNO, the new darling of Mobile, then it went from retail to wholesale and in the fracas we seem to have lost Value Added Services in the MVNO space.

Why MVNO VAS lag the MNO?:

  • Firstly, virtually all Value Added Services depend on having the correct OTA data provisioning settings on the device(s)
  • Secondly, many MVNOs are second SIMs or sold as a SIM only and a second SIM and therefore are put in devices that are configured for somebody else's Value added Services
  • Third of the basic issues is that wholesale platforms usually do not allow billing of the usual premium numbers, although we have solved that for a number of MVNO clients, and then other issues arising from these three key reasons are:
  • ROI is difficult to calculate, and models to be used (build or buy or rev share) cannot be evaluated until you have this data, its very chicken and egg in this sense - you cannot build VAS until you dip your toe in with a service that has the metrics and reporting to show what your customers are responding to.
  • Finally, everybody underestimates the effort required to get an MVNO up and running, and by the time you get the core services up and running, plus the other services that overrun, invariably value added services are "shelved"
A lot of MVNOs pride themselves on not doing or being Value Added Services, like low cost is not value add, when in fact it is. Easyjet stripped out the extra costs you did not want to spend money on (and some you did!) so you could travel more. Then they stayed as they were and Ryanair did it more, and then the Flag carrier airlines did the same...

And so the problem is, that an MVNO brings value to its customer by serving a niche. This niche, in itself is a value added service. a niche by nature, makes service that is geographically, socially or otherwise closer to your needs than the generic service provided by the MNO to all. That is, you are already in the Value Added Services just by being an MVNO: voicemail and IVR in the customers' languages, calls to their specific countries, USSD balance check, these are all small services that make the service more relevant to tier target audience that a) the MVNO often realises and b) that the MNO can do for every given niche opportunity.

Furthermore many MNOs bought into their MVNOs as a VAS, the MVNO services a market which it cannot itself address as cost effectively or service effectively as the MVNO: that is the value add.

What does this mean, well, if you are already a value added Service, but do not add more value:
  1. Your competitors and your and other MNOs will eventually be able to address this market themselves more cost and service effectively as the knowledge is shared and the employees move on, just like Ryanair did to Easyjet, the Flag carriers did, and so many other examples
  2. when your competitors move you will learn the true meaning of churn 
  3. Your only avenue left will be to further squeeze margins, which has Tesco supermarkets in a pickle. 

Emerging MVNO VAS

So what to do? do we need to create an app store or some apps like in my other blogs? Not necessarily. The first step is to get data provisioned. However that is not all, they key in this step is to slowly build your service, but:

Moreover, you need to have the metrics to see who you sent the settings to, who took up the service, with which device(s), and what services they went on to use. Its not hard, you can do this with a basic portal and some reporting tools. You then need some flexible SMS charging to dabble in the billing of premium services. The MVNO, like the MNO before them, will be surprised at who uses the service and how popular (i.e. revenue generating) they are, as well as how much loyalty is driven. I have seen MNOs and MVNOs with loyal customers of just €15 voice and Text ARPU but many times this in very simple VAS...

On this note, I have just published another article, following on the back of recent trends and the Nokia CEO's comment that it is no longer about devices but an ecosystem. The same is true of MVNOs, where the SIM is no longer a differentiator on its own, the lure of the first SIM is getting stronger and if second SIM MVNOs and alternative SIMs MVNOs do not react they will become churned SIM failed MVNOs.

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  1. Great article Christian!

    Some MVNOs have not realized yet of VAS value as you mentioned. One of the most frequent conflict is End Users do not know how to set up OTA data services.
    When it comes to "make things easy" some MVNOs are already loosing strengh.
    As you said, when no metrics are available no feedback neither.
    One Key service to fight churn may be just as simple as doing it easy for End Users.

    Thanks for your article!

  2. Actually Marco, my company provide OTA settings with the best and easiest user experience in the market:

  3. How do yo handle access to existing MNO VAS services which has branding of MNO to MVNO customers. (SMSC & USSD are shared between this subscribers)