Community Communcations Presentation

© TRADUM - better business

Community Communications

The next Over-The-Top generation of services and what has this to do with the old-fashioned term MVNO.


Trends in a converging Industry called ICT

25-27 May 2011 Executive Telecoms Summit 2

co2


OTT services challenge Telco providers in their core business

IMS Research: Service revenues in the OTT market will grow at an average rate of 32% through 2016, reaching $16.4 billion. à Free online messaging, voice and video calling services are digging into

classic revenue streams of telco providers.


WhatsApp


What does OTT – Over-The-Top – really mean?

Definition of the expression “Over-The-Top”:

•  Surpassing a goal or quota.

•  Excessively expressive or dramatic.

•  Over the breastwork, as an attack in trench warfare.



What happened to the MVNO Market?

•  On July 1, 1991, Finnish Prime Minister Harri Holkeri made the world's first GSM call.

•  In 1999, Virgin starts operating the first full MVNO in the UK, after regulatory approval in 1998.

•  In 2011, about 500-600 MVNOs are active around the world.

•  By 2015, Informa predicts 186 million MVNO subscribers.

Nokia 101 (1992)



What is a Mobile Virtual Network Operator?

•  „MVNO“ in a wider sense is used as an umbrella term for providers of mobile telephony services, without own radio spectrum, and without own radio network, but with different levels of technical and process integration.


Dealer / Reseller

Branded Sales Partner

Data Service Provider

Classic Service

Provider (ISP)

Enhanced Service

Provider /(ESP)

Network Service Provider

(NSP)

(Full) Mobile Virtual

Network (MVNO)

Mobile Network Operator

(MNO)

Radio License & Network

✔

Number Ranges ✔ ✔

Core Network ✔ ✔ ✔

Services / VAS ✔ ✔ ✔ ✔

Customer Care ✔ ✔ ✔ ✔ ✔

Billing, Pricing ✔ ✔ ✔ ✔ ✔ ✔

Branding and Advertising ✔ ✔ ✔ ✔ ✔ ✔ ✔

Sales & Distribution ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔

MVNO in a wider sense


What is “White Label”?

White Labeling, or branded reselling is a Multi Channel Marketing Strategy. •  Origins of the term “White Label”:

•  A white label record is a vinyl record with a white, non-branded label, produced to test market response of the recorded music.

•  Classic markets for white label products: •  Retail – e.g. ALDI with its own brands for food, detergents, apparel •  Household Appliances & Electronics – washing machines, TV-sets, radios… •  Credit Cards – Visa and Master card co-branding with Lufthansa, Amazon, etc.

…

•  More recent markets for white label products: •  Mobile Phones – e.g. BenQ manufacturing mobile phones for several

large international brands, or VERTU (built by Nokia) •  SaaS Internet services, like white label Social Media Solutions



White Label Definition

•  A product or service, where the provider of the service purchases a fully supported product from another source, then applies its own brand and identity to it, and sells it as its own product.

•  The purchaser assumes the seller is selling its own product.



Reasons for a White Label Strategy

•  Market testing / moving into new markets •  Testing without disclosing the brand name or localization of brand

•  Plant utilization / scaling the business •  Optimize cost driven commodity production by maximizing factory utilization

•  Destroy your own business / in-house competition / diversification •  Increase overall market share and create a challenge for own brands

•  Value chain split •  Companies focusing on their core skill – production versus sales/marketing

•  Market niche positioning / creating new product / service bundles •  Companies addressing clearly defined market niches with a different message



White Label Social Media Solutions

Forrester WaveTM: Community Platforms, Q1’09

•  With the internet, mass market B2C services became possible.

•  A new category of services was created: Internet Portals, like CompuServe, AOL, T-Online, Yahoo!, or Google.

•  As a result, every major consumer brand developed their own “portal”.

•  Today, social networking sites have taken the lead.

•  facebook, Xing, LinkedIn, mySpace have been outpacing the classic portals.

•  Social Media Solutions are offered as SaaS white lable service.

Source: Forrester Reserach, 2009

Ning



Gartner Hype Cycle



Social Network Subscriber Numbers

•  > 600 million members •  > 100 million members

•  > 1 million user accounts

•  > 800 million user accounts



The Creation of Over The Top Value Chains co2 - community communication services are emerging

•  Major players are joining forces and driving the convergence of value chains including Social Networks and Communication Services, creating integrated OTT co2 platforms.

•  All of them have in common: •  millions of registered users •  international reach •  cloud based services •  messaging features •  (video) calling functionality

•  Some offer: •  outbound to classic telephony •  inbound from classic telephony •  close interaction with carriers for inbound/outbound termination •  close cooperation with mobile or fixed line network operators in terms of revenue share models •  rumor: dynamic carrier selection (free choice of mobile operator) granting independence of MNOs

15-Nov-11 © TelcoMobile™ International 13


World Mobile Market Saturation

•  90% of the world population have access to mobile phone services

76,2

17,27

0

10

20

30

40

50

60

70

80

90

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010*

Per 1

00 inhabitants

Mobile

Fixed Line

*Es@mates The developed/developing country classifica@ons are based on the UN M49, see: hNp://www.itu.int/ITU-‐D/ict/defini@ons/regions/index.html Source: ITU World Telecommunica@on /ICT Indicators database

Fixed and Mobile Telephone Lines per 100 Inhabitants, 2000-‐2010*



MNOs are on a Dead-End Street

Comparison between Mobile Operators and Social Networks:

•  International Brands

•  B2C markets targeting millions of customers

•  Core product is a commodity

•  Stable platforms with established processes

•  MNOs have a high technical complexity and difficult processes •  MNOs have high infrastructure cost and scalability issues •  MNOs have an old industry attitude: they are slow and self-focused



Solution Scenario: Splitting up the Value Chain

•  The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market by Michael Treacy andFred Wiersema

a)  Product Leadership

b)  Customer Intimacy

c)  Operational Excellence


Technology Processes CRM Services … …


MVNO Market Share Forecast

0

50

100

150

200

250

0

2

4

6

8

10

12

14

2003 2004 2005 2006 2007 2008 2009 2010 2011* 2012* 2013* 2014* 2015*

Millione

n

Per 1

00 inhabitants

Subscribers

W.Europe & N. America World Average

*Estimates Source: PYRAMID RESEARCH, Telegeography

MVNO Share of Wireless Market, 2003-‐2015



?

MVNO Classifications

Business

Retail Brand

Ethnic

LifeStyle

Social Network

Fixed / Mobile Convergence

Roaming Cost Improvement

Discount

The Missing MVNO Class



MVNO Operating Models

Radio Access, Voice, Data, SMS

Number Ranges

Self-Operated MVNA MVNE

VAS

IN, HLR, SMSC

Customer Care

Billing Pricing

Branding & Advertising

Sales & Distribution

MN

O

MV

NO


Number Ranges

VAS

IN, HLR, SMSC

Customer Care

Billing Pricing



MN

O M

VN

E

M

VN

O


Number Ranges

VAS

IN, HLR, SMSC

Customer Care

Billing Pricing



MN

O

MV

NA

M

VN

O



Thread: Apple Dynamic Carrier Selection



The Issue of Sitting at the Bottom End without Realizing it


Access for Voice, Data, Messaging

(National, International, Roaming)

Customer Accounts

Communication Services

Value Added Services

MNO MNO MNO


The Black Swan Theory by Nassim Nicholas Taleb

•  The Black Swan Theory or Theory of Black Swan Events is a metaphor that encapsulates the concept that The event is a surprise (to the observer) and has a major impact.

•  After the Black Swan appeared, the event is rationalized by hindsight. Source: Wikipedia


© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 23

UC / UM


Wrap-Up

•  Commoditization will continue putting pressure on the MNOs.

•  Saturated markets do require differentiation of target groups.

•  In this case White Label is an established marketing strategy.

•  The MVNO market essentially is a classic White Label market.

•  There is need for access. Do what you do well and do it better.

•  Sun Tzu: Know your enemies. If you can’t beat them, join them.



Conclusion: MVNOs are OTT service providers!

A MVNO is a mobile communications service provider, which is purchasing a White Label mobile telephony service from a Mobile Network Operator, which may be enriching such services with their own Value Added Services (VAS), and which is selling such syndicated mobile services under their own brand to their specific target market segment.



Contact

André Panné Managing Director TRADUM UG (haftungsbeschränkt) Schönstrasse 65-B 81543 Munich Germany


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