Are private networks the new MVNO opportunity?

The telecoms industry is fast paced and there is always an emerging trend or technology stealing the limelight. Right now, it’s 5G and all that it brings. Shiny phones and applications make the headlines, but that doesn’t mean other 5G related technologies and applications are any less exciting. Indeed, if you are MVNO then 5G enabled private networks could very well be a shot in the arm for your business.

But what is a private network? They are generally networks created specifically for a single organisation operating on a vast area. Think ports, airports, power stations, manufacturers, utilities, universities and agriculture.

Private networks use dedicated mobile spectrum capacity rather than public mobile networks, (where service can’t be guaranteed), Wi-Fi, (where security and reliability can be shaky) and/or fixed networks, (often expensive and difficult to install in certain locations). An organisation will be allocated a slice of the network by the operator and can manage and secure it as they need.

At this point you may be questioning why this is an opportunity for MVNOs. After all, MVNOs don’t have a network so why would they be interested? It’s a fair challenge, however MVNOs have proven themselves to be great at building propositions and service wraps around a customer need, and normally a fairly niche need. As each private network serves a very particular set of needs for an enterprise it seems logical then that an MVNO could provide the solutions.

MVNOs are also fleet of foot and happy to exploit any market opportunity, something that the operators, who in many cases provide corporate mobile services, may not be as willing to do. In fact, private networks could be a risk to some operators. Put yourself in the shoes of an operator like Vodafone. The risk of a large enterprise client setting up a private network, potentially not with you, means that you loose your position as a strategic telecoms partner. That’s tough when there is so much money at stake.

MVNOs are also masters at partnering. That’s going to be important whether it is partnering with the enterprise that has spectrum or working with its host operator to go after particular industry verticals whereby it offers its own service, IT and management service wrap.

Indeed, with 5g network slicing models in place it is conceivable that MVNOs could stop being virtual. They could get a wholesale network slice and run their own local networks for enterprises, sports stadia, shopping centres and so on. I wonder how many MVNOs have considered that?

The market overall is growing dramatically and spending is expected to reach £8bn by 2023. And I think you’d agree that just 1% of that spend would be nice to have.

I see no reason why that isn’t a possibility. As I’ve described, MVNOs are well placed to capitalise on the interest enterprises have for private networks. But they will need a clear strategy to identify the best opportunities and get the operators on board to deliver successful implementations. I believe it’s well worth the time and investment and those that move first will get the biggest slice of the action.

If you want to know more about private networks and how your MVNO could capitalise on the burgeoning market then get in touch. We can help you make assessments and build a coherent strategy that operators will buy.

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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.