5G - is it a benefit or a curse for MVNOs

5G has landed but you’d be forgiven for thinking it’s lagging the expectation. The lack of handsets and applications in the UK is perpetuating this, but the reality is 5G is gathering pace in areas of life consumers don’t generally see – Lufthansa’s private network using Vodafone 5G is a case in point.

Given the slow start in the consumer sector, it would be easy to think there is no opportunity for MVNOs at the moment. However, armed with an understanding of the possibilities there are in fact plenty and with the right strategy there’s a chance to steal a march on competitors, including the operators.

What’s the hype then and why should MVNOs care? Above all, 5G unlocks new use cases and revenues. There are four main areas that MVNOs could capitalise on:

1.‘Cut the cord’ superfast broadband. Perfect for the new working from home scenarios we face for the short to mid-term. For renters this really could be a game changer too. No need to fuss over contracts or being offline while you wait to be connected by your ISP each time you move.

2.Entertainment. Gaming has rocketed in the last six months and according to NewZoo it will become a $153bn business this year. 5G will undoubtedly contribute to this growth helping to deliver faster, slicker gaming experiences. As a replacement to broadband you’ll also get faster downloads and be able to ditch streaming with every latest binge series instantly available on demand.

Looking to the success of 5G in South Korea, VR and AR will be the applications to tap into. Given retail challenges at the moment, we’ll see trying on clothing before you buy or being able to see if a big ticket item like a sofa will fit in your house as the sorts of applications that emerge first.

3.Massive connected IoT for business and consumer. There are some sectors very actively pursuing this strategy. Energy, utilities and the vision for smart cities being among the most advanced. The ability to pin-point a water leak with sensors on a pipe will take out all of the inefficiency and cost of sending a team out to dig up a road and work for hours in all weathers to fix it. Instead those teams can get to work quickly at the exact location and solve more problems in less time. That has to be good news for our consumption of resources, and the consumer’s pocket.

4.Private networks and network slicing. This is perhaps one of the most interesting use cases. And it’s where MVNOs can get in on the act offering universities, major transport hubs and alike their own secure, uninterrupted private network.

So far so good. Lots of potential. But only if you can create the right conditions.

Buyer Beware

There are some watch-outs for MVNOs when they plan their strategy. What if

your host network won’t share 5G? That’s an immediate blocker for MVNOs who want to gain share.
your host network allows you access but maintains the same old per GB wholesale model? You will be bankrupted in a week!
your customers just can’t afford 5G handsets – early handset launches will be premium, or the IoT customers you supply might not be able to justify a tech refresh.
your tech, the core network and beyond can’t be easily upgraded?

The solution, as always, is to look to the customer. They are less worried about the technology and more interested in the benefits it delivers. So there are some things to consider before you write off any chance of 5G being a part of your future.

Firstly, if your host is not keen to share, then think through how you can change the conversation you have. There are definitely ways to successfully engage operators and demonstrate the incremental value you will bring. (Our blog has lots more information on this here, and we can help with specific concerns you need to broach.)

Changing the approach and arriving at a mutual agreement on the positives will make the commercial conversation much easier. And let’s not forget the economics of 5G means operators will have a declining cost per GB anyway, so tackling the elephant in the room early can be worthwhile.

But what if your target audience struggles to afford a handset or make the business case work? Get back to basics. Why do your customers like you? What is it you offer that others don’t? Trade on that and develop packages that will address their concerns and the rest will follow.

You may need to face some home truths too. If for example, the tech upgrades on your platform don’t stack up then it’s likely you don’t have a compelling 5G business case. But that’s not insurmountable, with some expert help you may find a way to overcome this or arrive at a decision that you need to focus on different technology to boost your presence in complementary areas, or something entirely different.

And that’s really the key with 5G – assessing the opportunities and establishing how it fits with your brand, your assets and investment. In doing this, it’s important to remember that 5G is just an enabler. People really won’t care how the tech works as such. It’s the products and services that 5G delivers that will get them excited. So, with that in mind, make sure you look at all the options. Read widely about the examples overseas and the tech in beta trials. You could turn up some options you would never have considered. And in my experience, it’s sometimes the unexpected can deliver a whole new world of possibility.

But equally don’t be afraid to accept that the headline hype might not be the avenue to go down, it might be the behind the scenes applications that are the best fit, or none at all. You might decide that 5G isn’t for you and you can capitalise on the niche markets that others won’t attempt because they will focus on 5G.

Above all focus on the purpose of your brand and the elements that make it attractive to customers. 5G or no, it’s a strategy that any MVNO should adopt.

If you need help to assess the market opportunity, size, take the right decisions and engage an operator then we can help….

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James Gray

Managing Director at Graystone Strategy

James has over 20 years of experience working in the telecoms and retail industries. He is an expert in subscription-based business models, CRM, direct and indirect channel management and major proposition development and launches. He has held a number of Marketing Director and Consumer Director roles.