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MVNO's World Congress Paul Wade CEO Smarter Mobile Rome – April 2013
MVNO's World CongressPaul Wade
CEO
Smarter Mobile
Rome – April 2013
2
Introduction
Historically the Company derived revenue from three main streams:-
Coverage solutions and Private GSM solutions.
Primarily for NHS Hospital Trusts and Major Hotel and enterprise clients usingMulti-Operator Distributed Antenna Systems (DAS) as well as Coverage solutions, including the Design and brokering of multi operator schemes etc.
Value Added Services
where Smarter Mobile provides both “off the shelf” and bespoke Applications for customers requiring specific Mobile or Wireless Applications. •Communication Kiosks
•Footfall Monitoring and Tracking•Mobile Applications •Mobile Web•Mobile Ticketing•Mobile Content
Consultancy services
mainly focused around •Radio Frequency Planning such as the contract with Eaton Towers,•MVNO support such as UMS MVNE project in US/Canada •Jawal MVNO Project in Israel•as well as small ad hoc projects for Ericsson, Thales, AMC.
Smarter Mobile is a Mobile Solutions provider of infrastructure and services to the wireless telecommunications industry globally. Established in 2009, with the purpose of creating a simple way of setting up mobile services with carefully selected partners.
3
( holding co) ( holding co)
Wholesale agreementWholesale agreement( MVNE) ( MVNE) Wholesale agreementWholesale agreement
( MVNA)
( MVNO) ( MVNO)
Mi Gente Mobile
We now focus on the MVNO space
MVNOMVNOMVNOMVNO
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You buy wholesale and sell retail.
You make profits ( hopefully!) on the margin you generate.
You do not own the key asset for running a mobile business - the Spectrum and connectivity….. your host MNO does.
Creating an adaptable business model to both establish and expand your MVNO…
… remember market conditions change so be prepared to adapt!
The basic facts of an MNVO business
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MNO cost baseThe cost structure of an MNO is biased heavily towards fixed costs. The main fixed cost elements of the MNO are:•Network operations and maintenance (typically 30% of all fixed costs)•Sales (20%)•Customer service and billing (15%)•Marketing and communications (10-15%)
The main variable cost elements for the MNO are:•Interconnect costs•Customer acquisition•Customer retention costs
Rule number 1 - Understand your Host MNObusiness model
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MNO cost baseThe cost structure of an MNO is biased heavily towards fixed costs. The main fixed cost elements of the MNO are:•Network operations and maintenance (typically 30% of all fixed costs)•Sales (20%)•Customer service and billing (15%)•Marketing and communications (10-15%)
The main variable cost elements for the MNO are:•Interconnect costs•Customer acquisition•Customer retention costs
MVNO cost baseThe cost structure of the typical MVNO is almost completely the opposite of a facilities based network operator. The main fixed cost elements are relatively small and comprise:•Customer care and billing•Sales, marketing and communicationsThe variable cost proportions are dominated by wholesale airtime costs as well as customer acquisition. Wholesale costs can often represent 50% to 60% of a typical MVNO’s operating costs which immediately limits profit margins.
It is therefore essential for the MVNO to develop a business model that minimises the cost of customer acquisition and retention as well as fixed costs in order for the business model to be commercially viable.
Rule number 2 - Understand your business model
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MNO cost baseThe cost structure of an MNO is biased heavily towards fixed costs. The main fixed cost elements of the MNO are:•Network operations and maintenance (typically 30% of all fixed costs)•Sales (20%)•Customer service and billing (15%)•Marketing and communications (10-15%)
The main variable cost elements for the MNO are:•Interconnect costs•Customer acquisition•Customer retention costs
MVNO cost baseThe cost structure of the typical MVNO is almost completely the opposite of a facilities based network operator. The main fixed cost elements are relatively small and comprise:•Customer care and billing•Sales, marketing and communicationsThe variable cost proportions are dominated by wholesale airtime costs as well as customer acquisition. Wholesale costs can often represent 50% to 60% of a typical MVNO’s operating costs which immediately limits profit margins.
It is therefore essential for the MVNO to develop a business model that minimises the cost of customer acquisition and retention as well as fixed costs in order for the business model to be commercially viable.
Remember for a MVNO nothing is for FREE!
It is a “margin” business
Remember for a MVNO nothing is for FREE!
It is a “margin” business
Rule number 3
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The MVNO model Appears quite simple
Improving margins
Reducing operating costs
Reducing churn
Increasing ARPU
Earning customer loyalty
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MVNO’s are in fact technically complex
…and can be very expensive to set up
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We have gone a long way to remove that Complexity … and start up cost…
Already negotiated with Network Operators on your behalf
We already have a fully staffed and experienced Customer Call Centres – in the UK and the USA
We’ve already created a billing platform and connected it to the Network operators
We can produce your Branded SIM packs in weeks
We provide a range of Simple and straightforward tariff plans
We have a generous Revenue Sharing plan for you
…and can provide a full “Turn Key” service
X
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We understand the need to keep things simple….
Working with IKEA, one the worlds most well known Brands, we developed a mobile service that reflected their not only their Brand but their approach to their customers, one of keeping things simple and straight forward.
We have used that experience in creating our MVNO product with the keynote of Simplicity and speed to market
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The proposition
Family mobile was created to offer a low cost affordable Mobile Phone service to IKEA Family Card holders
Primarily SIM only offering with the tariff plan kept as low as possible
Majoring on the benefits of “shared” minutes via a Family Budget offering
Ease of use automatic top up
Integrated into back end loyalty programme
Giving IKEA direct marketing opportunity to its subscribers and creating brand loyalty
…using a “self care” approach
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That aligns with the Brand
…..and keeps it simple! - WYSIWYG
…as well as reducing costly customer care issues
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A MVNO business is only as good as its ability to create innovative marketing
… how????
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But what is innovation?
A MVNO business is only as good as its ability to create innovative marketing
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But what is innovation?
A MVNO business is only as good as its ability to create innovative marketing
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But what is innovation?
A MVNO business is only as good as its ability to create innovative marketing
… where to apply it …everywhere?
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Now it gets complicated…
… too many choices?
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Ok lets make simple….
… but what are the impacts of each option?
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Where to apply innovation ….
… to get the best results
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Value creates revenue….
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Value creates revenue….
… more revenue … great!
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But creating Value requires infrastructure….
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But creating Value requires infrastructure….
… the techies will love the chance to play with new toys!
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OMG ! - infrastructure generates costs….
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OMG ! - infrastructure generates costs….
… how are we going to pay for it?
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Bottom line - Viability is balancing act….
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Bottom line - Viability is balancing act….
… but you do need invest for future profit
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Focusing on niche market segments, MVNO’s are challenged to design new products and efficient delivery process. This means you need integrated systems and services to rollout the business to the end customer.
It may seem less painful to invent an original service, but it is often harder to configure the best solution. Expanding and developing your offering requires careful alignment with your overall business strategy.
Entering the MVNO market can be a huge risk without a cautious planning of the required tools.
It is does not get any easier if you are a new MVNO, already running a MVNO, or your MNO is planning to develop one.
A MVNO business is only as good as its ability to create innovative marketing
… it still means you need to plan ahead
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OSS/BSS is your key player in this strategy in providing a simple, easy and natural user experience with your newly created product/service packages.
By integrating the business process flow with your BSS environment, the MVNO processes need to be completely optimized for managing the critical customers' information and providing the best customer service.
No matter if you are established MVNO or a start-up, the present complex challenges can be easily managed with the right partner.
An MVNO in today's fast moving market needs to look to a “Configure on-demand”, business model with the right combination of tools appropriate for successful execution of processes that will bring the right solution to generate a mass of loyal customers while reducing OPEX.
Whatever the approach - flexible OSS/BSS and billing platforms are essential…
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OSS/BSS is your key player in this strategy in providing a simple, easy and natural user experience with your newly created product/service packages.
By integrating the business process flow with your BSS environment, the MVNO processes need to be completely optimized for managing the critical customers' information and providing the best customer service.
No matter if you are established MVNO or a start-up, the present complex challenges can be easily managed with the right partner.
An MVNO in today's fast moving market needs to look to a “Configure on-demand”, business model with the right combination of tools appropriate for successful execution of processes that will bring the right solution to generate a mass of loyal customers while reducing OPEX.
Whatever the approach - flexible OSS/BSS and billing platforms are essential…
… to deliver new products and to keep costs under control!
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MNO cost baseThe cost structure of an MNO is biased heavily towards fixed costs. The main fixed cost elements of the MNO are:•Network operations and maintenance (typically 30% of all fixed costs)•Sales (20%)•Customer service and billing (15%)•Marketing and communications (10-15%)
The main variable cost elements for the MNO are:•Interconnect costs•Customer acquisition•Customer retention costs
MVNO cost baseThe cost structure of the typical MVNO is almost completely the opposite of a facilities based network operator. The main fixed cost elements are relatively small and comprise:•Customer care and billing•Sales, marketing and communicationsThe variable cost proportions are dominated by wholesale airtime costs as well as customer acquisition. Wholesale costs can often represent 50% to 60% of a typical MVNO’s operating costs which immediately limits profit margins.
It is therefore essential for the MVNO to develop a business model that minimises the cost of customer acquisition and retention as well as fixed costs in order for the business model to be commercially viable.
Remember for a MVNO nothing is for FREE!
It is a “margin” business
Remember for a MVNO nothing is for FREE!
It is a “margin” business
Rule number 3
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How did we do it?
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MNO cost baseThe cost structure of an MNO is biased heavily towards fixed costs. The main fixed cost elements of the MNO are:•Network operations and maintenance (typically 30% of all fixed costs)•Sales (20%)•Customer service and billing (15%)•Marketing and communications (10-15%)
The main variable cost elements for the MNO are:•Interconnect costs•Customer acquisition•Customer retention costs
MVNO cost baseThe cost structure of the typical MVNO is almost completely the opposite of a facilities based network operator. The main fixed cost elements are relatively small and comprise:•Customer care and billing•Sales, marketing and communicationsThe variable cost proportions are dominated by wholesale airtime costs as well as customer acquisition. Wholesale costs can often represent 50% to 60% of a typical MVNO’s operating costs which immediately limits profit margins.
It is therefore essential for the MVNO to develop a business model that minimises the cost of customer acquisition and retention as well as fixed costs in order for the business model to be commercially viable.
To minimise resources and have predictability of costs we chose
to “outsource” our OSS/BSS requirements both in the UK
and USA
To minimise resources and have predictability of costs we chose
to “outsource” our OSS/BSS requirements both in the UK
and USA
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Back-office
Handset/logistic
Network / VAS
Back-office
CC & Billing
Call Center
Handsets & logistics
Customer Care
Campaign Mgmt.
Brands & Distribution
Voice & data capacity
MVNO
Voice & data capacity
MVNO
Voice & data capacity
MVNO Expertise
CC & Billing
Call Center
Back-office
CC & Billing
Call Center
Handset/logistic
Customer Care
Campaigns
Private LabelMVNO’s
Operator Margin
We chose the “Multi Brand” platform
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Using the CDRator platform enabled Family Mobile provide a complete self care online facility for customers to manage their account
…….Reducing calls ( and cost) to the Call centre for support
=
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1. Business Case Assessment or Development2. Pre-Integrated Sales, Provisioning, Account Processing, Taxation reporting, Customer Service
and Tech Support 3. Handset and Device supply and logistics4. Pre-Integrated BSS/OSS to Sprint’s Network5. Experienced Operational Team familiar with Sprint’s internal environment
Same model in the USA
Delivering a suite of business solutions to meet your needs:
MVNO - Hosted & Managed MVNO - Stand Alone Integrated Contact Center Services Stand Alone Contact Center Services Full Consultancy
Using the same platform UMS delivers a pre-integrated set of business tools necessary for the successful launch and operation of a MVNO in the USA including:
…….using same knowledge base
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Wholesale agreementWholesale agreement
( MVNE) ( MVNE)
Wholesale agreementWholesale agreement
( MVNA)
( MVNO) ( MVNO)
Mi Gente Mobile
Minimising costs by “shared” resources…
MVNOMVNOMVNOMVNO
…….across multiple environments and countries
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There is no magic to running a MVNO
Improving margins
Reducing operating costs
Reducing churn
Increasing ARPU
Earning customer loyalty
Just hard work and dedication – like any other successful
business
Just hard work and dedication – like any other successful
business
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But just to finish with…….
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A frequent mistake is to just look a the market from the end user perspective - and think you can identify the cultural gaps to “localise” your products
More often the real issue is the need to address your own internal mind-set to understand how to do business in a new cultural environment
It goes beyond merely acknowledging cultural differences. It means you need to adapt your behaviour to conform to new cultural contexts without losing yourself in the process. Not only is this difficult, it’s a frightening prospect for most people and something completely outside their comfort zone.
No matter how good you think your product is, no matter how well it sells in the UK, the United States or anywhere else, you need to really look at that product in the context of the local needs and say is that the right product, is it too high-priced, do we need to do something different,
The importance of adapting your business model to acknowledge cultural differences
…….keep asking yourself.. do we need to adapt?
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"There is no such thing as the Chinese market," says Martin Roll, a business and brand strategist who provides advisory to global and Asian brands on China. "You have to look at China more like a mosaic of cultures," he adds.
The need to understand different distribution channels in Asia
There is no single consumer profile, and analysts suggest companies remain flexible and innovative, while understanding how their company would fit in each specific market.
"There's no simple answer in China -- it depends so much upon the specific market and upon the specific characteristic of your own company," he adds.
Actually, this holds good for any new market – no matter how well you think you know a market, you need to surround yourself with local talent can help you break deals, understand the culture and the complexities of the market as well as compensate for the language barrier
