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?

The post MVNOs could soon be your satellite mobile provider, if their wholesale contract allows appeared first on Graystone Strategy.

In total, the Graystone team ran three masterclasses, scoring on average 4.9/5 to 5/5 on likelihood to recommend the classes to others.

The distances attendees had traveled was quite astonishing. Every corner of the globe, and every life stage of MVNO, was represented.

It was a strong reminder that although the MVNO model is well established in Europe, there are still many markets that are at the start of their journey and need expert knowledge and experience to guide their strategy.

The standout class in terms of diversity, focused on building a partnership with your host MNO.

The binding operator agreement is the most important partnership agreement for any MVNO to sign, and experience tells me that it can define the success, and sometimes failure, of MVNOs.

During the course of the conference, in quiet corners and in hushed, and sometimes embarrassed, tones, I heard catastrophic tales of MVNOs that did not pay attention to their partnership and terms of their contract and who now find themselves in very dire straits. Consequently, there are now people knocking at our door asking for help to avoid being the next anecdote.

On the flip side, there are MVNOs that have built an incredibly positive relationship with their partner host operator. Strategic goals are aligned and there is a mutual, 100% commitment to joint success.

But I think the really interesting insight came from new markets. I had underestimated just how much help new entrants need from specialists. There is a lack of skill on the ground for them to turn to and often, because the concept is so new (in local terms) there’s not even knowledge within the operators themselves.

Every MVNO and MNO can learn from our discussions in the masterclasses. Many think MVNOs magically appear overnight. They don’t. There’s an extraordinary amount that must happen – there’s a real art to getting one to the point of signed contracts, let alone to market.

What I took away from the event was that there is little unified clarity on what ‘good’ looks like.

I’ll take Nigeria as a great example of this conclusion, but I hasten to add, it is by no means alone.

The market has licensed just under 50 MVNOs across a range of license classes and technical models. This approach has meant that there is at least some sort of blueprint for the technology build that everyone can align against.

But when it comes to the commercial constructs, the wholesale contracts and how wholesale and MVNO should work together it is almost a blank piece of paper.

On the one hand MVNOs have a lot to do, building their proposition, their tech, their brand and distribution models. But MNOs who have never done wholesale are in a similar boat.

They also need to build out their commercial approach, API access, commercial contracts, support teams etc for MVNOs, all with distinct information barriers between their wholesale and retail business.

I’ve seen this blank page scenario before, and generally it leads to an enormous amount of frustration from licensees, because it seems impossible to get a credible deal and contract from an MNO.

In Nigeria, I hear stories of an extraordinary situation playing out. To get things done, the MNOs are asking the MVNOs to tell them what to draft into wholesale contracts, simply because they don’t know where to start. MNOs are assuming that the breadth of conversations MVNOs are having with technology suppliers, gives them enough knowledge to shape the contract. But the truth is, MVNOs are none the wiser. The phrase, blind leading the blind, comes to mind.

The takeaway should not be about who is to blame for this situation, but instead, MVNOs cannot happen magically. The levels of negotiation that are involved really aren’t for the faint hearted. I know from doing it on behalf of MVNOs and MNOs that they are complex to arrange and therefore agree.

I’m not only referring to the commercials and structuring the contract. Agreeing how you will run your wholesale team is also complicated.

There are a lot of decisions that the MNOs need to make about strategy, everything from information barriers between teams, through how they will technically wholesale the network, to how they will resource the support that the MVNOs need, provide the wholesale billing technology and how they ensure that there is separation between their retail customers and their wholesale customers.

It took a lot of work to deliver this for Vodafone back in 2006, and even after it was delivered, we only took on maybe three to four MVNO projects a year maximum. Pace is not on your side when it comes to MVNO deals.

Imagine having to do all of that with no guidance, no instruction book and probably 50 organisations beating a path to your door asking you what the answer is and wanting to negotiate with you?

In the case of Nigeria, not unreasonably, the MVNOs are expecting the MNOs to lead this. They are the telecoms experts, they are selling a wholesale service for commercial gain in a competitive market, and they have a responsibility to the regulator to deliver.

So how to square the circle? It’s my firm opinion that MNOs need to have a cohesive wholesale strategy to support this regulated change. They need to invest in teams and technologies to facilitate that strategy and deliver against their regulatory requirements. And if they can’t source expertise and experience locally (difficult as no one has done it, or Globally if they are a group company) then they need to seek external expert help.

There is no shame in that. It’s the smart move and will give any MNO that does it, the first mover competitive advantage. They will avoid costly mistakes and benefit from global best practice.

Our masterclasses are just the tip of the iceberg when it comes to helping both MVNOs and MNOs unpick their options and progress strategically. If you’d like to know how we can help you specifically, then contact me.

The post New MVNOs markets can’t wave a magic wand for growth. It takes time, patience and knowledge to build the MVNO ecosystem. appeared first on Graystone Strategy.

Now the hard work starts. How will the MVNOs launch and win a slice of the 195m mobile subscriptions Nigeria boasts?

Experience shows that there are five specific areas of the go to market plan that need attention immediately to ensure a smooth and successful launch:

• Start with the customer. All too often I see MVNOs approach their launch as a technology project. I agree it’s exciting to buy new platforms and technology and work on the complex challenges of stringing it all together. But it is an entirely worthless exercise if you have no clarity on who your target customer is, what they want and how you plan to build a differentiated proposition for them. Without this clarity you could end up buying technology you just don’t need or make the expensive mistake of investing only to discover that further investments are required to deliver the customer proposition you decide to launch. Think about the different segments you may want to target and how you can offer a truly differentiated proposition to that segment. That might be in the value you offer, the distribution (e-SIM offers a great opportunity to reduce joining costs), or how you treat customers. Nigeria offers a wealth of different communities and enterprises to target and I wouldn’t be surprised if at least some of the licensees are considering targeting business customers, or even stepping into IoT and Private networks to support some of the large industries in Nigeria.

• Build a great relationship with your host MNO. As part of the licencing process, MVNOs had to engage with one of the network operators in Nigeria and secure a Memorandum of Understanding (MOU). But that’s only the start of the relationship and, now you have your licence, it’s worth ensuring the partner is still the best fit. It’s not unheard of to renegotiate, switch, or go for a multi-network deal particularly in a geography as vast as Nigeria. Choosing the right host is critical for success for so many reasons whether it is coverage in the geographies you wish to target, getting the right commercial offer that rewards you as you scale, or simply ensuring that the partner is bought into your success. But the biggest reason is overhead, as depending on the tier you have selected, the wholesale costs could be as much as 65-70% of your gross traffic margin. You’ll need solid negotiating skills and a compelling story to back up why you should get better rates, access to technologies and so on. As you progress your launch, the network operator will want to understand more about your target customers and go to market plans before contracts are signed. Don’t forget that you are technically a competitor, so your launch plans need to be communicated carefully. Only speak with the wholesale team and ensure that your host operator is using clear information barriers between wholesale and retail. Operators should be thinking about how they will support the new licensees. It’s new territory for them and meeting the needs of the MVNOs, and doing so at scale, is something they will want to get right. In my experience, the best host operators build a distinct wholesale team or business unit and treat the relationship as a partnership that delivers incremental growth to both brands. If you feel like you’re being treated like a supplier or a less important customer, then your mobile network operator has some work to do. The alternative is that operators partner with a Tier 4 licensee and then get them to manage the multiple other MVNO via aggregation or enablement services. It’s a light touch approach for the operator but adds ‘mouths to feed’ in the value chain.

• Learn from other markets. Although each market has its own unique challenges, there is also a great opportunity to review and understand what has been successful elsewhere. There’s plenty to draw on. I’d strongly advise getting to one of the established global MVNO events, either the Informa MVNOs World Congress or MVNO Nation, where you can hear for yourself the ways MVNOs have outplayed the market. They are also great places to meet, network and learn from a small and friendly MVNO ecosystem community. Fundamentally, look for propositions that have worked elsewhere and adapt and amend them to suit your local customer needs. Whatever you do, do not be tempted to just copy existing propositions in your market, even if you can do it more cheaply. It’s simply not a sustainable business model, and it assumes that the existing MNOs are always getting it right for customers. When I was chair of the 2023 MVNOs World Congress, there were plenty of examples where MNOs are missing tricks that MVNOs are exploiting. The most frequently cited challenge is that offers and tariffs must be dictated by inflexible, legacy technology stacks. As a new MVNO you can take a more digital and cloud-based approach, which will enable faster delivery, more flexibility and ultimately a better customer experience.

• Fit your technology around the proposition. This brings us to the next priority – technology choices. Assuming you have worked out the proposition you need, and your commercial offer gives you clarity on what your host operator will provide (putting you in a position to deliver your proposition make a margin), then you can go shopping! One of the consistent themes at the MVNOs World Congress was how MVNOs have been able to accelerate growth through the agility of the digital systems provided by their vendors. It’s a broad category too covering everything from OSS / BSS suppliers, core networks, through payment solutions, apps, web channels, to e-SIM, and CRM. The key point on vendor selection is to manage a process that lets you select and buy systems that are flexible and scalable and offer the capabilities your customers need. Think about the use cases for the tech and whether the vendor can support them, with a proven roadmap for growth and future differentiation. For instance, if you are planning to build a B2B proposition, look for vendors with proven skills serving that market – it’s very different to meeting the needs of consumers. If it’s IoT then the needs will be different again – security and management systems are likely to be a high priority.

• Resources – The hard truth is that none of this will be possible without money and people. MVNOs typically run very lean even though the tasks that need to be done are the same as those of an MNO (apart from running the network). Think very carefully about your target operating model and what resources you will need when, and whether they need to be permanent resource or contracted as required. When we work with clients on their go to market plans, we always build a resources plan that reflects how the roles and individuals change as the MVNO grows. It starts with a team for start-up, which grows for scale up and finally arrives at steady state. It’s always worth thinking about the experience you need too. A competent marketer from any market will have transferable skills but when developing products and propositions you will need someone who understands the nuances of mobile. Don’t be afraid (or too proud) to ask for professional help. The amount of MVNO go to market experience in Nigeria is going to be relatively scarce and in high demand. Look further afield if you need to. Specialist consultancies like Graystone Strategy can help, either supporting the delivery or acting as board advisors, mentoring, and coaching your local leadership team and allowing you to leverage experience of multiple MVNO launches globally.

We’ve highlighted just a few of the many blogs we have on graystonestrategy.com that share our experience and expertise of launching, running and growing an MVNO, but you’ll find all of our content here.

If you really want to accelerate your learning then it’s definitely worth considering our ‘Everything you need to know about launching an MVNO’ interactive workshops

Or get in touch to talk specifically about how we can help you. You can reach us through our contact us page or drop me a WhatsApp on +447766244962.

The post The five MUST DO actions Nigeria’s new MVNO licensees should take for a successful launch appeared first on Graystone Strategy.

However, one stone we’ve yet to turn over in detail is that of the opportunity in B2B and why some MVNOs could diversify and capitalise on the solutions 5G will enable.

It’s easy to think that when there are already brands dominating the B2B space there’s no room for new entrants, or to suppose that a brand won’t stretch, especially if they significantly under index or have a very marginal representative market share.

Gartner predicts that by the end 2021 there will be 25 billion connected things in use. And with the pandemic instigating a wave of everything from connected living and home working to IoT innovation to address urgent social and healthcare needs, I say that’s perfect conditions for growth and innovation for MVNOs.

Historically MNO activity has been about offering a great service and price for business communications, with the level of ‘managed service’ options increasing based on the size of the organisation.

Traditionally, B2B has lagged behind the consumer segment in terms of innovation and pricing. More often than not this has come down to complexity.

However, it’s surprising how even the most paired back of offers could cut through if executed well. Some small boutique telecoms and IT suppliers are proving that you can successfully compete against the big boys because they are taking the time to develop exciting and targeted bespoke services. They are of course more agile and it translates into focused and targeted marketing strategies.

5G steps this all up a gear and presents new options for product and service innovation – everything from smart cities delivering intelligent traffic routing, through saving water with sensors on water pipes to robots picking our defected product on manufacturing lines.

And that’s only part of the story. We’ll see more and more fixed and mobile convergence in the coming months. It’s now a necessity to manage teams working from home, or more erratic hours in an office.

Network virtualisation and cloud technologies are leading the way in terms of creating fully integrated fixed, mobile and IT solutions to support this. Put a customer service wrap around it, one that solves the pain many businesses face, and you’re well on the way to a successful and differentiated strategy.

And that’s the key – anyone can integrate services, but not everyone can deliver a standard of customer service that helps its customers grow, innovate and compete.

Certain segments will be facing different pressures, be that a buoyant switching market as we see in the insurance and utility sector, regulation that drives change in the financial services industry, or the adoption of IoT in the manufacturing and logistics sector.

Understanding these operational opportunities and difficulties is where the opportunity lies. But the real winners will be those who don’t just solve the problems but do it in a way no one else can. Skill will be critical. Me too won’t wash. Companies need to tap into the ‘extraordinary’ from their service providers so that they can achieve the extraordinary. And they are willing to pay for it if the ROI is proven. Tap into that and you have boundless growth potential.

If you’d like to discuss how your business can develop marketing strategies that capitalise on the growing B2B market, then contact Graystone Strategy today.

The post 5G trend watch – Why the B2B market is ripe for MVNOs appeared first on Graystone Strategy.