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Cartesian Ltd. Registered in England and Wales. Registered Number: 03230513Registered Office Address: Descartes House, 8 Gate Street, London WC2A 3HP United Kingdom
Cartesian Perspectives
What Does the Future Hold for the MVNO Market?
January 2012
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Cartesian™ is a specialist provider of consulting services and managed solutions to the global communications, technology and digital media industries
Company Overview
• Offices in Boston, Kansas City, London, New York and Washington
• Onsite and offsite delivery models to suit client needs; partner network of ICs, technology providers and SIs
• Clients across six continents include communications service providers, technology vendors/OEMs, digital media, financial companies and regulators
• Proven understanding of business strategy and client issues
• Expert assessments of operations, platforms, and business processes to support corporate strategies
• Аward-winning technology platform and 20+ years experience deploying solutions for CSPs
• Industry specialists, focusing exclusively on communications, technology and digital media
• Expert operational know-how and project management skills, with proven methodologies across content areas
• Several hundred consultants, averaging 15 years of sector-specific experience
Capabilities
Global Reach
Industry Focus111101000110010110101101001000011000101101000110011101001001111001110110101010100110101000010001010111101100010101001011110010010110100010110100101010010111010101010101001011101001010110100101011010100101101001110110101010010100101101001011101001011010001011010010101001011101010101010100101110100101011010010101101010010110110100010100101101001010110101001000
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Our clients are the global leaders in the communications, technology and digital media industries
Example Clients
Mobile • Fixed • Cable/MSO • Satellite • Cloud & Hosting
Service ProvidersConsumer Electronics • Enterprise • Software & Apps
Components • Infrastructure • Intermediaries • Integrators
Technology
Digital Media • Automotive • Energy • HospitalityHealth • Insurance • Retail
Media & Verticals
Government • Regulators • Industry Groups • Foundations
Influencers
Private Equity & Venture • Funds • Commercial Lenders
Investors
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We offer end-to-end professional services through strategy development, execution and a suite of managed solutions
Service Portfolio
Growth & Transformation
Market & Competitive Assessment
Go-to-Market Strategy
Corporate Strategic Planning
Deal Development and M&A
Legal & Regulatory Support
Program Management (PMO)
Operational Excellence
Product Design & Launch
OSS/BSS Transformation
Networks & Infrastructure
Business Assurance, Risk, Compliance
Ascertain® Platform Solutions
• Sales & Marketing Optimization
• Customer Lifecycle Management
• Device Lifecycle Management
• Assurance & Fraud
• Network & Provisioning
• Business Intelligence
Managed Analytics
Smart Building Solutions
Business Process Outsourcing
Strategy Execution Managed Solutions
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MVNO Expertise
Cartesian has worked on 40+ MVNO projects throughout the US, Europe, the Middle East and Asia
• Strategy and business case support including detailed cost and revenue modelling
• Negotiation support for contracts and commercial terms
• Vendor evaluation and selection, including architecture design
• Securing funding
• PMO and launch support (e.g. proposition development, distribution, platform deployment)
MVNOs
MNOs
Regulators
• Assessment of MVNO policy, regulation and market impact
• International regulatory benchmarking and support with preparation of NRA’s regulatory licensing framework
• Preparing the MVNO business case, drivers and alternative operational and commercial models
• Detailed cost and revenue modelling to calculate MVNO / wholesale commercial terms
• MVNO and sub-branding strategy including scenario analysis
• Cost modelling to determine wholesale pricing
• Identification and recruitment of wholesale / MVNO partners
• Development of optimal operational and technical architecture
• Internal segmentation analysis
• Vendor short-list, assessment and selectionConfidential
Retailers
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Context
In Q4 2011, Cartesian conducted research and analysis to understand the state, current and future trends, and likely evolution of the MVNO market
Interviews
• Cartesian interviewed a number of key individuals within the MVNO space, including MVNOs, MNO wholesale teams, MVNEs and
MVNAs
Secondary Research
• Cartesian conducted secondary web research to capture details on recent MVNO launches, failures and success stories
Thought Leadership
• Cartesian drew on its knowledge base and experience from over 40 MVNO projects
• We hypothesised trends and validated with research
Outputs
• The research and analysis was conducted throughout Q4 2011
• Findings were presented at the MVNO Conference in Paris on November 22
• This presentation contains the results of our analysis, and focuses on 12 key trends in MVNO: 6 emerging opportunities, and 6 trends impacting the market
Scope of Thought Study
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Key Questions
Throughout this Thought Study, we address the following key questions:
What is the state of the MVNO market today?
What are the emerging MVNO opportunities?
How are commercial and operational models evolving?
What are the emerging MVNO opportunities?
How are commercial and operational models evolving?
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New MVNOs
MVNOs continue to roll out on a weekly basis…
Nov 2011
US
$19/month service mandating WiFi offload for calls and internet usage
Oct 2011
Mexico
Complementing Megacable’s existing triple play offering
Oct 2011
Spain
A low cost service launched by Spanish portal Movilonia and MVNO Ortel Mobile
Oct 2011
Switzerland
Targeting ethnic communities. Already operates in five other European countries
Sep 2011
Austria
Retailing via a network of tobacconists across the country
Sep 2011
Australia
Competitions to Red Bull events and two handsets with a dedicated Facebook button
Sep 2011
Germany
A service provided by an auction TV channel from Germany
Nov 2011
Malaysia
Targeting the youth sector, offering 365-day validity for top ups
Oct 2011
UK
Customers pay upfront for a 1, 3, 6 or 12 month contract
Nov 11
Netherlands
A low cost service launched by Dutch supermarket chain Dirk van den Broek
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Lack of demand
Lack of funding
Regulatory
Lack of demand
Brand Rationalisation
Lack of demand
Not as profitable as core business
MVNO Failures
…However, failures still occur for common reasons
Source: Prepaid MVNO, Mobile News, Cartesian
xx
xx
xx
nutshell
hablafacil
xx
xx
Ethnic (youth British Asian market)
Charity / donation
1st MVNO in market, prepaid
Customers with poor credit ratings
Immigrant
Youth
Quad-play
Nov 2010 – Sep 2011 (11 months)
Oct 2010 – Aug 2011 (11 months)
May 2010 – Aug 2011 (16 months)
Mar 2010 – May 2011 (15 months)
Mar 2009 – Dec 2010 (22 months)
May 2009 – Oct 2011 (30 months)
Nov 2010 – Mar 2012 (17 months)
Reasons For FailureCountry Description Duration
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MVNO Market Share Worldwide
Market share and growth trends vary significantly by market
Sources: Cartesian, Nereo, company websites, press releases
South America<1%
Hong Kong:• Total: 8%
Japan• Total: 2% • JCI (largest MVNO)
Australia:• Total: 4% • Virgin Mobile• Boost Mobile
Oman:• Total: 9% • FRiENDi (6%)• Renna (3.%)
USA:• Total: 7%• Tracfone (19.3m)
Virgin recently acquired by Sprint (was second largest MVNO with
~2% market share)
Europe (representative sample, not exhaustive):• Germany, 19%• Norway, 16%• Netherlands, 14%• UK, 13%
• France, 10%• Denmark, 5%• Finland, 2.5%• Czech Republic, 0%
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Operator Focus on Mobile Wholesale
Operators are placing an increasing emphasis on MVNO, driven in part by success stories
“Sprint has more than 100 customers reselling its network capacity and plans to increase that number by at least 10 percent in the next year”
“To expand the reselling business more rapidly, Sprint has started offering a broader array of services, such as billing, marketing support and competitive analysis”
Matt Carter, President of Sprint Wholesale Solutions and New Ventures
Wholesale
Retail
Share of Net Adds, Q3 2011
35%
65%
UK
Denmark
US
2.5m 4%
0.7m 14%
19.3m 7%
Country /MVNO
SubsMarket Share
Malaysia
1.4m 4%
Example Success Stories
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Trends Impacting MVNO
We see 12 major trends impacting the MVNO industry
Ensuring Success through Evolving Commercial and Operational ModelsEmerging MVNO Opportunities
7
2
3
4
6
5
Explosion of data and smartphone adoption
Wi-Fi Offload
Wholesale LTE
M2M
Internationalisation
Roaming
1Micro-segments enabled via MVNA
11
8
9
10
Diversification Beyond Low Cost
MVNO vs. OTT
Evolving commercial models
Full MVNO Models
12 Data Intelligence
MVNA
MNO
MVNO
MVNO
MVNO
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For a full free copy of this study, or to discuss potential areas of support, please contact us:
Contact Information
Mike GreeningVice President
+44 (0) 7739 570829
www.cartesian.com
