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