1. Changing MVNO Business Models When you look at how business
models are evolving for MVNOs, it helps to look at what is changing
with their carrier partners. That is the advice from Peter Jarich,
vice president of consumer and infrastructure for Current Analysis,
who notes that what he is seeing on the carrier side is a focus on
device financing, getting subsidies off the books, network quality,
and pushing prepaid in a direction that makes it more affordable.
These changes put pressure on MVNOs in terms of how they target
their market segments and how they structure their service
offerings. While certain technology advancements show great promise
in delivering network efficiencies and cost savings, they arent the
types of advancements that might allow an MVNO any type of
technology differentiation, Jarich notes. All those things MVNOs
have thought about in the past, things like prepaid, or targeting
lower cost services, are kind of going away. At the same time the
carriers are improving network quality and focusing on it. So it
wont be as big of a difference going forward. Which means that
MVNOs have to think about where they can differentiate, he says.
Where MVNOs still have the edge is in their nimbleness to seize
opportunities that the carriers cant. They can target certain
constituencies, or market segments, and build communities of common
interests among their customer bases. They can also get more
creative in their billing relationships with customers. For
instance, an MVNO might give away the first 5 GB of data for free
each month, and bill only for what customers use beyond that. Or
the first 10 texts every day are free. Or they might work with
content providers so that their customers could visit certain
sponsored websites free of any usage charges, only being charged
for visits elsewhere. For MVNOs, its also a matter of developing
and offering additional value-added services that customers are
willing to pay for. With the playing field leveling between MVNOs
and carriers, this could be the differentiation that wins, and
keeps, customers. The more an MVNO is able to leverage unique
agreements with partners and enablers, the more it can stand out in
the market. Jarich adds that the carriers arent being particularly
proactive at pricing or bundling content at this time, and that
could spell opportunities for MVNOs. These opportunities, he
cautions, may not be there forever, but at least there is a window
right now. Its up to MVNOs to watch for the opportunities that
arise and also create new ones of their own. By being alert to the
market and moving with it ahead of it wherever possible and being
creative, they can uncover and exploit those opportunities. For
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