MVNOs could soon be your satellite mobile provider, if their wholesale contract allows
Here’s some exciting news that you may have missed in the run up to Christmas, Ofcom has given the go ahead for the use of mobile spectrum for satellite-to-mobile services.
I think this creates a new kind of space race as the UK vies to become the first country in Western Europe to boast the connectivity.
As you can imagine, they’ll be some strict rules in place to protect air space safety, but under the terms set out by Ofcom, mobile operators and satellite providers can use existing mobile spectrum for direct-to-device services.
If this wasn’t exciting enough, consumers won’t need a special licence to take advantage. It really could be a game changer for rural coverage gripes.
As you can imagine there’s already been some activity in anticipation. Notably O2 has partnered with Starlink and Vodafone has inked a deal with AST Space Mobile.
This prompts an interesting question for MVNOs: will they get parity on the deals being done?
As a general rule, best practice guidance when developing an MVNO contract (and certainly the ones Graystone Strategy has been involved in) is that there is a contractual clause giving MVNO parity of access to existing AND new technologies.
So that being the case, I’d expect a queue of MVNOs at the doors of O2, EE and Vodafone, expecting access to these new satellite services for their customers.
They’d be within their rights – assuming the contracts are designed to best practice guidelines – to ask for a wholesale arrangement, and availability of a satellite product within a reasonable amount of time.
What the agreement wouldn’t cover is the wholesale price for accessing the satellite technology. The MNO would need to set this as the new products and services are developed.
In the case of satellite access, with no real precedent, it would likely trigger a price negotiation between the MNO and the MVNO, but having the parity of access clause is crucial to get your MNO to the table. Without that, then likely the MNO will retain satellite services as an exclusive product only available to direct customers.
Proposition development
It’s important to say, I am not privy to any information, but I would expect MNOs to position this as a premium service, perhaps stipulating it’s run as an out of bundle charge, or included in mega packs of data you add on. It could also be a B2B sell initially. It will be very much down to the wholesale costs the MNO is paying to the satellite providers to access their network of satellites.
Check contracts now for parity and to gain differentiation
It’s interesting that the shoe is on the other foot. Now the MNOs will experience some of the challenges in negotiating access and pricing with satellite providers, that MVNOs have experienced when negotiating with their hosts.
I certainly think it’s worth checking your wholesale contract wording and engaging your MNO to see what the potential is, and if you don’t have parity of access add it to your list of things to renegotiate at contract renewal time!
I’d also suggest evaluating what a market offer could be and how you’d use it to grow your brand, and whether such a product is even relevant to your customer segments.
I think there’s huge potential to differentiate here, and I do think people and businesses will be willing to pay for it. Connectivity is the fabric of life after all. But there will be a balance – getting pricing wrong, or making it too complicated to access an offer will be a turn off, and will open the door to a competitor to swoop in and take the prize.
If you would like some help determining your position with regards to contracts, negotiation points or proposition development, then we can help. This a core offer from Graystone Strategy, so why not give us a call and see how we can help you join the space race?
