Free entry to French Mobile market

Free MVNO France

Are MVNOs Free in France?

Its an interesting twist on words, calling a new operator "free" but that is a comment for a coffee later. And no, the answer is nothing is free in France, you pay for everything, even being an MVNO :)

What is interesting is the MNOs starting to see the strain of Free. When Virgin Mobile was launched in the UK a similar trend occurred, whereby many people had just had enough of  the complexity and uncertainty of spend on traditional tariffs. In this sense, Virgin Mobile had close to 2 million customers when it had expected to have 200,000.

So what does this mean for MVNOs? In reality these people are the early adopters / first movers. Those whose dissatisfaction with their present offering is so strong that they will take anything new on the market. This is an interesting phenomenon I have seen from my last few MVNO launches in mature markets, whereby you can allow for a certain take-up, sometimes even a breakeven figure of users, to be attracted to a new network just by addressing a niche well enough to capture a single digit percentage or even percentile of a mature market's monthly mobile churn.

So what does the MNO do when and MVNO has its breakfast?

So these were the first movers. In the next two years we will see the me-too's and followers follow, typically 70-80% of any given market, and these will be best attracted by mainstream, niche and other MVNOs that successfully target and attract users from any given market segment that the MNO itself is weak in. So this is a clear sign that French MNOs need to open up to wholesale and capture these niches as strategically and innovatively, and as quickly, as possible.

In many MVNO business models, I have had this element of customer attraction, which I call "churn soak-up" at anything between 5% and 40% of an MVNOs take-up in the critical first 6 to 9 months of operation. The amount of take-up is directly proportional to how well this MVNO business plan, brand, product and proposition addresses a niche, and to some extent how much and what type of marketing is done to address the market and the strength of the MVNO's brand. If you are willing to invest the time (and some money) in getting both the brand and the proposition right and targeting the brand/proposition well (all within sensible SAC margins) then this element of take-up can be in the double digits of growth and soaking up significant percentages of churn in a market.

Update 2013, post 2012 networking conference in Paris: The host MNO did nothing, another MNO took the two biggest MVNOs as full MVNOs on their network! as the Dutch (KPN) say: wholesale is better than no sale!

The flipside? when done well, these customers stay with the MVNO brand that successfully addresses  the niche, long after they have churned from the "rebound" operator, in this the rebound fling is Free in France :) (yes I got to one of the amusing twists of its name :)

MVNO VAS

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 thenew 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.

There are a few reasons for this:


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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).