eSIM opportunity for MVNOs, MVNEs and manufacturers as per Dallas MVNO conference

The eSIM is a hotly debated trend and was the subject of the two panels I spoke on in the Dallas 2016 Wholesale Connectivity Convention where in addition to the usual blurb I was keen to get actual dates from panellists on when they thought the technology would become mainstream. I warned I would write these dates down and blog about them, but have stopped short of saying who said which date in order to protect the innocent!

eSIMs were an integral part of 

There were two panels,  The Panel on Global connectivity with eSIM as a sub topic (morning) with Gigsky, my old client Tim previously of Microsoft, now with Transatel and the omnipresent Dave from Aspider.

Speaking with Gigsky, Transatel and Aspider on eSIM as part of how global connectivity can drive growth

In the afternoon session we had another old client of mine, Federico Homberg from Deutsche Telecom, Steffen Frenck from the SIMalliance, David Buhan from Gemalto and Tony Wyant from Gigsky again. The key outcome for me is that I asked all the panel and some of the audience to give me a date when they believed that eSIM would make mass market (and yes I did emphasise that I was taking notes), when it would appear as a viable option in Niches (alongside normal SIMs) and two in between options emerged: mainstream in niches, such as smart watches; and "in every new car".

Mainstream eSIMs are still a way away, however for certain specialist players / trusted parties there are niche opportunities

The writing on the wall is that that mass market eSIM is a good few years away / not coming anytime soon and the reasons for this discussed and offered were:

Supporting eSIM is complex and requires trust from vendors

Many MVNEs and MVNOs saying they are going into eSIM, that they can support eSIM, etc, etc. However they generally stumble on the following.

Financials

eSIM means distribution is "easy" (although its not necessarily the case, see "managing eSIM is complex" below), however the reality is that the business is very unpredictable;

1.  essentially people can take an eSIM for a month, a week, a day or even just a few hours in an airport, and then not return for a few months if ever, yet someone is stuck with paying costs for that user on an HLR, CRM, billing system, etc. most of which are billed somewhere along the line on the fact that they will be used for a good few months, not a day here or there.
2. forecasting is impossible
3. USP / customer ownership - there is very little to leverage other than cost
4. loyalty - there is none in many cases!

Managing eSIM is complex

The biggest issue I have come across to date is the concept that many have whereby they say "we can support eSIM", when in fact is what they mean is "we have tested eSIM".  This gap between what you can do for 1, 10, 100 or even low 1,000s of SIMs vs. what you can scale is the bane of the mobile industry and one of the key limiting factors of MVNOs and MVNEs growing, and often sadly also the demise of MVNOs and MVNEs as it prohibits them hitting critical mass. The bad news is that it only gets worse when you add the scale and complexity of eSIM.

This is a bit like saying, "I can send an email, sending emails works from our systems" which just about anybody can say, however this is very, very different from being able to manage a busy inbox efficiently, and even further away from having an email sending system and email management system installed, integrated and working for a specific application! does not mean I have an email campaign management system!

The most recent case was a couple of years ago and eSIM was at the core of the service proposition; At the 11th hour the need for a third party eSIM platform and integration was required. In hindsight it all became clear to me, as said MVNE did not even have simple OTA ability in house, so managing sSIM was a whole level of pain higher. 

eSIM requires trust and relationship management

the eSIM relationship is one that often requires deep sharing of what many MNOs, MVNOs and OEMs consider highly confidential data that very few people in the business, let alone outside of the business are allowed access to. Mismanagement of this type of data to the wrong party or a party who cannot manage security credibly is asking for that OEMs customers to have their private pictures shared or their phones calls disclosed, and so again, there is a litmus test here. Having spent last two years integrating a whole suite of MVNE services to make the most complete MVNE service we were amazed how many services are not even using basic security, like SSL for portal and API access for example, how is an OEM going to trust a service like this with deep access to their OS, for example? 

MNOs have no need or requirement to support eSIM in short to medium term

The biggest issue however will be MNO resistance, as they really have no need for eSIM in the mainstream in the timescales that are above:

• Handsets are getting bigger
• The device ownership timescales are getting longer
• MNOs have invested in significant retail and distribution presence

The upside to eSIM opportunity in the immediate term

The upside for MVNOs and MVNEs that can pass the tests above, is that the emerging opportunities are often too niche or too International/complex for the MNOs (e.g. multi IMSI). 

MVNO Event Series Interview Growth Areas, Challenges for MVNO in 2017

Q: Tell us about yourself and your position at Conecto?

I am Christian Borrman, CEO of Conecto, Conecto is an MVNE in the UK and US, originally also in Mexico. Conecto provide flexible and scalable solutions for MVNOs notice of all sizes.

Q: what is the current state of the MVNO Market?

The MVNO market has hit a bit of a plateau in there are lots of people trying to do things however the lot of people who have found the present solutions are either not scalable or that they're too limiting, or if they started in one sense (i.e MVNE vs. MVNA)  then they may have to throw that all away and start again (if they grow) or they have to risk and start very big and probably never gets that size they expected.

Conecto provide a solution that lets them start very small and grow as big as they want or need , and if at some point the MVNO wants to buy out of that solution the MVNO can (and still stay with the same APIs, CRM, and other systems). We have seen that a lot of players are actually looking at our Conecto model is a way to go forward with  and MVNO model they have been investigating for a while as well as existing MVNOs they have just not been able to scale, and  move forward where the MVNO was not moving forward before.  

Another big issue has been a lot of consultation with the network operators which has effectively just made it a lot more difficult to get a wholesale agreement that people (MVNOs) necessarily want. This consolidation is a period that has lasted now for about 2 years and I think we're coming out of that finally,  and so this should make things a lot easier (with no MVNO competition a competitive wholesale deal is very difficult) and so we should be seeing a lot of next generation MVNEs and MVNOs taking advantage of cloud MVNE flexibility, and taking advantage of the renewed appetite of wholesale operators for MVNOs (post consolidation or no consolidation) and as such we should see a renewed growth in MVNOs in the coming months and years.

Q: Where do you see new opportunities in the MVNO market?

Well I am probably not the best person to ask because we spent a lot of time in Mexico where in 2015/2016 that was where there was supposed to be the next big growth area (and we acted upon) which it wasn't for various reasons that we won't go into... What we have seen on a practical note that there is a lot of untapped opportunity in the US and in the UK and some extent in Europe and that is then moving in the next year or so, as I see it, to Africa and the Middle East being the next big growth areas that we certainly have on our radar and (is evident in terms of opportunities) on our CRM system, and for me are upcoming opportunities.

Q: In what region do you see the biggest growth for MVNO?

I still think there is a lot nascent growth in Europe and the US, there is just a lot of people who do not have solutions to their problems or the solutions they want to their problems from the existing players (...and many of these players have left the market) and we have seen situations such as Audi buying an (going to the extent of buying an) MVNE (a company just does not buy a provider / solution they are happy with in normal market conditions). We are see a lot of big players

Airlines and and car manufacturers either creating their own Solutions, buying their own Solutions or coming to companies like Conecto with Next Generation Solutions and there's a lot of untapped growth there which may or may not come to fruition in the next year or so.  In a slightly more mid to longer term I think Africa and the Middle East are growth areas, and the LATAM area can grow again but there are serious issues in terms of competition and regulation that need to be overcome.

Q: Why should MVNOs attend our events?

As I have said a few times I think it's the key area where people can come together, twice a year for the International Events and at least once a year for the Regional events. It's very difficult to meet people from all around the world, and sometimes it's difficult to even arrange meetings (with key partners, let alone) see everybody in one place. For such a niche market you need to have an excuse and a place to go, and this is the place where I get to meet everybody in the industry in one place and have back to back meetings without distractions of needing to solve this problem all that problem which of the end of the day, mobile as a complex business and there's always things delaying and putting meetings off so, if you have an excuse to congregate somewhere X times a year, then that is the (one time) when you can get a lot achieved.

Come and meet Conecto at the Acropolis Nice, 24-27 April 2017

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

2015 PRE CONFERENCE WORKSHOP - 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.