It is never an easy question to answer. Wholesale contracts are complex documents covering everything from commercial terms and service levels to customer support, billing arrangements, and regulatory obligations. There is rarely one clause that outweighs all others.

However, if I were compiling a list of the five most important clauses then one covering network and technology parity would undoubtedly be near the top.

Technology parity ensures that an MVNO can access the same network developments, upgrades, and future technologies as the host mobile network operator (MNO). In practical terms, it prevents MVNOs from becoming second-class providers operating on outdated technology while their host networks move ahead.

More importantly, parity provides a foundation for fair competition. It allows MVNOs to build propositions, customer experiences, and brands based on consistent service quality rather than constantly trying to explain why their offering lacks capabilities available elsewhere in the market.

As the industry enters a new phase of innovation, that protection has never been more important.

The growing momentum behind direct to device satellite communications (D2D) demonstrates exactly why technology parity matters.

Right now, we are seeing operators investing heavily in technologies designed to extend connectivity beyond the reach of traditional mobile networks. Direct satellite connectivity promises to deliver mobile services in remote locations, rural communities, vast landscapes and seas.

That’s why telecommunications authorities around the world are evaluating how satellite and terrestrial networks can coexist while protecting existing spectrum users and ensuring public safety.

In the UK, Ofcom has taken significant steps by authorising the use of mobile spectrum to support direct satellite-to-mobile services and also outlining the conditions under which those services can operate. Companies deploying satellite connectivity will be expected to implement measures that protect airspace operations and other critical services while delivering enhanced coverage to consumers.

Initially, many of these offerings are expected to focus on emergency communications and lightweight data services in locations where conventional mobile coverage is unavailable. For rural communities and travellers, that could represent a major step forward in connectivity.

Regulation creates opportunity

These developments highlight an important reality in telecommunications. Technology companies may drive innovation, but regulators remain the gatekeepers.

No matter how advanced a technology may be, it cannot achieve commercial scale until regulatory frameworks are established and market access becomes possible. Once those frameworks are in place, however, the flood gates open and we should expect the pace of adoption to accelerate remarkably quickly.

We are already seeing evidence of this across multiple markets.

In the United States, T-Mobile has been actively developing its satellite connectivity proposition. In the UK, Virgin Media O2 has begun promoting its satellite-enabled services following its agreement with Starlink. Vodafone has also announced customer trials scheduled for 2026 through its partnership with AST SpaceMobile.

Meanwhile, Deutsche Telekom has outlined ambitions to move beyond basic emergency connectivity and launch fully integrated data, voice, and video services via satellite by 2028.

Taken together, these announcements demonstrate not only the speed of innovation but also the scale of transformation that could occur over the next few years as regulators make their moves. 

Why MVNOs must pay attention

For MVNOs, the key takeaway is simple. The race has already started, and you need to be ready for when regulators fire the starting pistol in your jurisdiction. 

Not only that, as new technologies become commercially available, customers will increasingly expect access to them. As we know, connectivity innovations that initially appear niche often become mainstream far more quickly than anticipated – look at eSIM.

The challenge for MVNOs is to ensure the terms of their wholesale agreements support their next move.

If technology parity is already in place, gaining access to new capabilities can be relatively straightforward. If they are not, MVNOs may find themselves negotiating from the back foot and may need to secure entirely new agreements with their host networks or explore direct commercial arrangements with satellite providers. 

Negotiating direct, is of course an option, but as is often the case it’s often more time-consuming, more complex, and more expensive.

In many cases, the most practical first step is to engage with your host operator and explore opportunities for access. Wholesale partnerships are built on commercial relationships, and discussions are always worth having.

However, MVNOs should recognise that satellite-enabled services are likely to be viewed as premium products. Host operators and technology partners will be looking carefully at distribution strategies and selecting partners capable of bringing meaningful value to the market and recovering the investment they make.

Access alone is unlikely to be enough. MVNOs will need a compelling proposition and a clear plan for commercial success.

Understanding what parity really means

One common misconception is that technology parity guarantees identical commercial treatment. Never lose sight of the fact that parity and pricing are two very different things.

A technology parity clause is typically designed to ensure that an MVNO can access the same products, services, and technological advancements available to the host operator’s own customers. It does not guarantee is identical wholesale pricing.

In my experience, even where parity exists, there will almost always be separate commercial negotiations around wholesale costs. The introduction of new technologies often creates additional investment requirements, and operators will naturally seek to recover those costs too.

As a result, MVNOs must carefully assess the economics of any new service. Can the technology solve a meaningful customer problem? Does it create sufficient value to justify a premium price? Will customers be willing to pay for it? Can the proposition generate sustainable margins?

These questions remain just as important as securing access itself. And you must answer them for your business and be ready to give the answers to your host too.

Building contracts that grow with you

Perhaps the most important lesson here for MVNOs, is the need to think beyond today’s requirements. Many wholesale agreements run for five to ten years. In an industry evolving as quickly as telecommunications, five years can feel like an eternity. Technologies that seem experimental today, like satellite, will become standard. 

That is why wholesale agreements should not simply address current needs. They should provide protection against future uncertainty. Whether the issue is satellite connectivity, network upgrades, pricing changes, or entirely new categories of digital services, the principle remains the same. MVNOs must ensure they can remain relevant and competitive throughout the life of the agreement.

That’s why I continue to beat the drum on market parity, because those that fail to plan a contract around future developments risk being left behind.

That’s why we’re here to help. We can deliver masterclasses so you know how to negotiate effectively, or we can step into negotations for you and get the clauses you need to future proof your strategy. Talk to us today. 

The post Technology parity is a must for MVNOs today, here’s why. appeared first on Graystone Strategy.

Haast’s fast gaining traction because its AI powered compliance platform alerts companies to risk of legal breaches and compliance bottlenecks when completing business tasks such as preparing and agreeing contracts, through to developing content and marketing campaigns. It’s designed to be multi-language and work across highly regulated industries including telecoms, utilities, pharma and finance. 

This disruptive approach to using AI for compliance has helped it win numerous Fortune 500 companies and international brands including Telstra, Aviva, and Zurich.

Building a channel partnership pipeline

Under the terms of the partnership, James Gray, managing director of Graystone Strategy, and Paul Jefferies, associate client director, will use their global expertise in go-to-market strategy and segmentation in the telecoms industry and parallel sectors to help Haast expand into the fixed and mobile sector, and related industries such as utilities and mobile phone insurance. 

“We’re excited to be working with Haast, which is fast becoming the leader in AI compliance management in complex, regulated sectors. Haast’s growth trajectory shows a strong appetite among business leaders to use its platform to transform how they operate,” said James Gray, managing director of Graystone Strategy. 

“Haast’s innovative platform is designed to provide an extra pair of hands for in-house legal teams, accelerating the parts of the compliance process that slow them down. The result is a legal function that can move at the pace of the business – without compromising on regulatory commitments.”

Paul Jefferies, associate client director at Graystone Strategy, explains why telecoms is a prime candidate for distribution: “Our goal is to help Haast build partnerships in the telco market. Telecoms is a prime example of a fast-paced, complex and regulated industry that must constantly find ways to unlock more efficiency and stay ahead of the competition.”

“We think Haast will give telcos the capability to do more in less time, and will be especially useful for organisations that can’t afford more legal resources, despite recognising its value to their business,” Paul concludes.

Haast’s platform offers UK businesses an efficient, scalable way to ensure that compliance doesn’t hinder growth, as Wessel Van Keulen, Founding AE Europe at Haast explains: “Our platform can support legal processes in every facet of a business and cuts compliance review time by 80%. We’ve proven you can increase an existing team’s capability using AI and as a result, grow the business without putting compliance at risk.” 

“That’s why we are excited to work with Graystone Strategy to expand our reach in the UK,” Wessel adds. “The team’s deep understanding of the regulatory landscape and its expertise in go to market strategy will be invaluable as we scale our business growth and bring the benefits of AI-driven compliance to a wider telco audience.”

Business leaders interested in discussing how Haast can help drive AI compliance solutions for their business should contact the Graystone Strategy team at enquiries@graystone-strategy.com.  

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In terms of strategy, no. I think we could see it from a mile away. Timing wise, yes. To do it a year on from officially merging two brands was sooner than I, and no doubt markets and analysts, had expected. 

The deal is made up of a £4.3m cancellation of shares and an anticipated £700m cost and CAPEX saving. A decent chunk of change in anyone’s book.

This will be realised by bringing the 100% owned company into the Vodafone Group and leveraging ‘synergies’ and, undoubtedly benefits from technical consolidation.

There are other upsides. The big one being it will neutralise the political concerns about Chinese ownership of critical infrastructure. This is likely to sit well with large enterprise too.

Yesterday, I was asked if I thought this would trigger additional CMA interest.

My gut reaction is that it won’t. There is no real change for consumers, and you could argue that consumers will do better out of the leveraging of intra Vodafone Group benefits. 

Plus, originally there were some substantial competition remedies on the table to ensure consumer and wholesale competition remains at a level comfortable for the CMA.

Which leads me to unpacking another anniversary present / question. One year on, how effective have the remedies been?

Avid readers of my blogs during the run up to, and announcement of the merger will know that remedies were as follows:

1. Investment plan of £11bn to create the largest 5G SA network. This had to be delivered in 8 years with key milestones over that period.
2. Special tariffs that were identified as good value for cash challenged households must be retained for 3 years (2 years left now).
3. A commercial deal was done to allow the merged entity to remain in the site sharing agreement with O2, which involved O2 buying some spectrum from Vodafone Three.
4. A regulator wholesale reference offer was approved, the aim being to maintain competition in wholesale markets. Existing MVNOs also benefitted from some wholesale carve out.

So, has it been successful? At a general level, I would say the UK market is still competitive. The Three brand is still trading and advertising, and as a consumer I haven’t seen a massive price hike, above the usual inflationary increases that the MNOs level (MVNOs not so much). 

I am a Vodafone customer and have been since I started working for them in 2002, and overall I think I have seen improvements in coverage locally through the network sharing and deployment of MOCN.

We haven’t seen the massive MVNO bonanza as I was expecting. But then it’s only been a year.

But, we have seen launches mostly via MVNAs such as eSIMGo, Gigs and Gamma. This includes brands such as Zim, Tekmoni, Rocket mobile, Millwall and other football brands.

In terms of larger multinationals, Gigs has enabled Revolut on Vodafone Three, which is part of a broader mobile strategy across multiple markets. Interestingly, Revolut has used 1Global in other markets so there is healthy competition in Europe.

And we shouldn’t forget the 1Global deal with Lidl which is expected to bring up to 30 MVNOs globally. The UK is likely to be one market that Lidl seeks to build on its increasing grocery market share (8.5%) and a region where it can also integrate its loyalty app.

There have also been a large number of announcements of intent to launch, including AO, Monzo, Klarna and Netonmia.

Part of the remedies include the expectation that Vodafone Three will send an annual report to the CMA detailing progress against milestones and demonstrate that remedies are working as expected. We wait to see what comes out. 

Overall, I would say the wholesale market in the UK is still busy. Large brands are interested and 12 months is really early days, albeit we have used a third of the 3-year window for remedies. 

I would say the next 6-12 months are going to be critical and I am forecasting more, larger brands coming to market, which I’ll report on as they happen. 

So, all that remains to be said is ‘Happy birthday Vodafone Three’! Some surprises but largely expected performance.

The Graystone Strategy team is the official training partner at the MVNOs World congress, where we will deliver three masterclasses on all aspects of delivering a successful MVNO. They are free for conference attendees so be sure to secure your slot. And if you need help determining your MVNO strategy in the wake of this announcement, drop me a line. We’re always happy to give some initial advice. 

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Launching a retail MVNO is, of course, not a new idea. We’ve seen this happen all over the world. But I think it’s the scale that is breathtaking. It’s a huge statement of strategic intent from both sides, and a reminder that retail MVNOs remain one of the most powerful, and, in my opinion, underutilised, growth levers. 

Lidl’s ambition to leverage its retail footprint in multiple countries, combines ingredients successful retail MVNOs boast, including the option to distribute at scale and capitalise on high levels of consumer trust. 

Coupled with access to 1Global’s digital expertise, Lidl is on the road to creating a compelling mobile proposition that can be set directly into the retail experience.

The case for retail MVNOs

Looking back over the last five years, MVNO performance has rocketed and, in some countries, MVNOs post better growth than their operator hosts.  

Close to home, retail MVNOs account for over 40% of all MVNO subscribers in the UK. Tesco Mobile alone has over 5 million subscribers and has successfully expanded into Ireland, the Czech Republic, and Slovakia. 

Alongside it, brands like Asda Mobile, iD Mobile (from Currys), Coop Mobile, and Superdrug Mobile are showing that a close bond between the mobile and retail experience pays off. 

You don’t even have to be trading with shops either, as proved by AO’s announcement last June, that it too will launch an MVNO very soon. 

Internationally, the success stories are just as compelling. The standout example is the market disruptor Bait, Walmart’s MVNO in Mexico. It’s seen extraordinary growth and now holds the number two spot in market share, outperforming two established network operators. 

On the other side of the world, Aeon in Japan, and Woolworths in Australia, are great examples of retail MVNOs that work because they already had so many of the ingredients critical for a successful retail MVNO. 

So why do retail MVNOs work?

Having worked across multiple retail MVNOs, including iD in Ireland, Coop Mobile in the UK and Channel Islands, Asda Mobile, Superdrug Mobile, and even the now-retired Mobile by Sainsbury’s, I’ve seen firsthand what separates the successes from the also-rans.

It comes down to a few critical factors.

1. Unmatched customer access

The first, and arguably most important advantage is customer access.

Retailers like Asda and Tesco have tens of millions of customers passing through their stores every week. That level of engagement dwarfs what traditional mobile operators can achieve. Mobile is a low-frequency interaction; grocery retail is often weekly, if not more.

Retailers also typically enjoy significantly higher Net Promoter Scores (NPS) than telecom operators. In simple terms, customers like supermarkets more and are willing to switch to them for their mobile.

2. Low customer acquisition costs and high lifetime value

Retailers with stores are perfectly placed to convert footfall into SIM sales at a fraction of the cost incurred by traditional operators. They have the space in store to allocate to sales either as concessions, or SIM displays at checkouts, and the staffing is taken care of. Plus, with a steady stream of customers through the door, there’s no need for expensive above the line marketing campaigns to drive awareness and footfall.

This dramatically lowers customer acquisition cost (CAC) and gives retailers the flexibility to invest more in customer offers such as bigger data bundles, better loyalty rewards, and / or compete aggressively on price. 

Retail MVNOs perform exceptionally well on key metrics like margin per square foot. I’ve seen how a small footprint in-store can generate disproportionately high lifetime value (CLV), especially when compared to the relatively thin margins on everyday grocery items.

3. Integration with loyalty

The real magic, however, lies in integration. The most successful retail MVNOs don’t treat mobile as a standalone product. They embed it into the broader shopping experience. This is where many weaker propositions fall.

When mobile is linked to loyalty schemes, member pricing, or exclusive discounts, it becomes far more compelling. Customers aren’t just buying a SIM, they’re unlocking additional value with a retailer they already engage with and trust.

And the benefits are felt both ways. Mobile drives retail, and retail drives mobile. As not only does the MVNO generate incremental, recurring monthly revenue, but it also drives the core retail business. 

Some of the best retail MVNOs I’ve seen, incentivise customers to increase their visits to store, and how much they spend using loyalty point accelerators, discounts, and vouchers. This results in significantly higher retail basket spend and improved customer loyalty.

4. Customer perception is king

Trail blazers like Tesco and Aldi Talk legitimised retail MVNOs 20+ years ago and won over generations of consumers who only grew up with the option of a big operator. The latest generation of mobile users have never known a market without MVNOs. The net result is that brand loyalty to MNOs has waned, and there’s a readiness to switch to brands that are not traditionally associated with telecoms. 

Lidl and 1GLOBAL make for a winning combination 

Lidl knows it can achieve the same results. It brings enormous scale, a strong value-led brand, and a growing digital and loyalty capability, and when blended with 1GLOBAL’s technical infrastructure and international reach, they’ll be able to execute across multiple markets. 

And, dare I say, with brands like Revolut in the 1GLOBAL stable who knows where Lidl could branch out to. Banking and financial services is also a fast growth MVNO segment. I wouldn’t be surprised if there’s a longer-term strategy there. 

Whatever the future holds, for now they have the ingredients for a highly competitive retail MVNO proposition, and it should prompt other retailers, especially in the UK, to stop and think. 

There are plenty of brands with the scale, loyal customer base and infrastructure to make a retail MVNO work. Morrisons More, Boots and its Advantage card, and the various Co-operative groups, spring to mind as contenders. Even Sainsbury’s, despite the previous exit of Mobile by Sainsbury’s, could revisit the opportunity, particularly given the strength of the Nectar scheme today. 

Given the grocery market is so competitive and the challenger brands are not only taking share and winning the price wars but now sharpening their focus on growth through MVNOs, it would seem fool hardy for other retailers to be complacent.  

In my view, this will spark the next wave of retail MVNOs. Because when one retailer moves, others follow. 

20 years ago, retail MVNOs felt like a risk. Why would a brand take money from the business to invest in an unproven model, when you could build another store, refurbish one to add new product line or even buy a competitor?

But now the numbers stack up. The model is proven, with global success stories and strong underlying economics. We talk about their merit every year at MVNOs World because they work. Not only that, MVNOs work hard for their parent brands. 

For retailers sitting on the sidelines, the question isn’t whether this model works. It’s whether they can afford not to be part of the next generation of retail MVNOs. Those that dally, genuinely risk losing out to competitors on both customer numbers and incremental revenue.

So, if you want to be part of the new era but need help with the proposition, the business case, technology choices, or wholesale contract, then Graystone Strategy can help. Our team have negotiated and launched many successful retail MVNO and are perfectly placed to get your strategy off the ground. To get in touch click here.

You can also book a face-to-face meeting with us at MVNOs World, June 1-3^rd in Amsterdam here.

The post Could the Lidl 1GLOBAL MVNO announcement signal a new wave of retail MVNO growth in Europe?  appeared first on Graystone Strategy.

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?

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Yet, for employees there will be uncertainty. Having worked in both companies over the years, it’s fair to say that bringing together two diverse cultures will be a significant task for the leadership team. For the merger to work, people will need to be at the heart of the discussion. 

Reducing duplication

That will bring about a debate on skills needed today and how it must bend as the new company goes through various transitions. What does the HR strategy look like for a new company of this size and nature, and what resource is needed to suit the future strategic direction? 

We’ll learn more about this as the broader strategy unfolds, but there can be no doubt that successful delivery will be underpinned by the mammoth network integration and rationalisation. After all, this was the prevailing case for a merger; if the UK wants to lead on connectivity then this must happen. 

Technical integrations of this scale take years. However, everything that hangs off the network must also be consolidated. There will be no luxury in having two of everything – two CRMs, two brand agencies, two BSS. The list is endless. Expect a scrap between the suppliers vying for strategic partner status. 

In the short-term, employees will welcome the job security that will come from managing the process of reducing everything by half. But – and it pains me every time I write this – jobs will go as the process kicks in. 

Three will fade

Getting back to the real basics of a brand, Vodafone’s  has much more equity than Three’s and ratings by the likes of Which? show how far behind Three is. It’s always been my hunch and it remains so now that I’ve seen the new logo, that the Three brand will eventually be dropped and making it easy to revert to a singular brand identity. I’m not a brand expert but I can’t see how a 51% stake in favour of Vodafone plays out any other way. VodafoneThree will be intent on making every ‘synergy’ it can for the ‘new normal’ and that includes the brand. (Buzzword bingo at its best.)  

Wholesale reviews

At a wholesale level, the remedies are now in full swing, so there will be some frenetic energy in the market. I suspect the wholesale team will be inundated with requests as every MVNO takes a look at what there is to gain. And, depending on the scale of the commercial requests, commercial aggregators like Gamma, eSIM Go and Gigs will be asked to step in. Good news for that side of the market. 

But what of the customer? 

Isn’t this all about them? Customers won’t care about any of the above so long as they get good value and service. 

They might start to care more about the impact of the merger when store closures are announced as the retail estate is thinned, or the inevitable network outages happen as a consequence of the integration projects. There’s just no way of avoiding interruptions to service that the aspects of bringing together large organisations will cause. 

There could be a bit of immediate friction too. Higher value Vodafone customers might balk when they realise former Three customers get ‘all you can eat unlimited deals’ for a fraction of the price. It will be interesting to observe how they handle this. 

What’s the right course of action for MVNOs?

1. Request reference commercials – This requires a written request, signing an NDA and, if you are a new company, a convincing pitch to VodafoneThree that you will deliver scale.
2. Review propositions – Can you do something new to target customers who question the validity of staying a VodafoneThree customer? Should your plan be to anticipate outages and seize on the chance to swoop in? 
3. Review your three year strategy – I would expect VodafoneThree to have very specific remedy and post remedy strategies so be warned. Discuss your options now, not when there’s a surprise change. 
4. Use your clout – If you are an MVNO on either Vodafone or Three building and protecting a base you have commercial clout post remedies. Turn this to your advantage and do the analysis to determine if your current wholesale offer is better than taking the remedy offer.
5. Think about your talent pipeline – There will be some great people, with huge experience and knowledge coming into the jobs market. Think about how you can scale with them onboard. 

If you want help running analysis of your commercial terms and how making adjustments could help you grow your business more quickly, then get in touch. We’re here to help. 

The post MVNOs look out. VodafoneThree has landed. appeared first on Graystone Strategy.

But, in gathering reaction from leaders across the market, I can see that several clauses in Friday’s CMA announcement rattled a few cages.

For instance, if you take this paragraph at face value, you could conclude it’s game over:

“may be expected to result in a substantial lessening of competition (SLC) in two markets in the UK. These are the supply of retail mobile telecommunications services to end customers, including both consumers and business customers (the retail market), and the supply of wholesale mobile telecommunications services (the wholesale market). “

In truth, there is nothing new here – it’s the CMA’s remit to explore this aspect of a merger.

The same is true for this clause – it’s not a new concern.

“The Merger would reduce the number of MNOs from four to three, making it more difficult for independent MVNOs to secure competitive terms, restricting their ability to offer the best deals to retail customers. This is important because many MVNOs price aggressively, often focusing on value segments of the retail market.”

It’s true, MVNOs who are usually challengers and price leaders could experience wholesale price increases and hence be unable to drive competition. But if contracts have been drawn according to what I believe to be best practice, and would always recommend, there will be some price protection and the option to renegotiate periodically. If wholesale prices went up, then of course, over time we should expect retail prices to rise too. But there are ways to remedy both challenges, which I’ll get on to.

“Most consumers also told us that they would not be willing to pay more for better quality. We therefore have significant concerns about the impact of the Merger on the large number of consumers who might have to pay more for improvements in network quality they do not value.”

I’m sure if you were asked if you want to pay a premium for quality, you’d be reticent.

But let’s be pragmatic for a moment. If it was a wholly price-based decision, wouldn’t Three as the cheapest mobile operator have the most customers in the UK market? There is clearly a difference between what consumers say and what they do, and I think the JV will push back on that.

It’s this paragraph that reveals the nitty gritty of the debate and indicates that compromise and negotiation are options. The CMA is willing to consider remedies that the two parties want to put forward.

“We are also consulting on potential solutions to our competition concerns. These include legally binding investment commitments overseen by the sector regulator, Ofcom, and measures to protect both retail customers and customers in the wholesale market. We will retain the option to prohibit the Merger should we conclude that other remedy options will not address our competition concerns effectively. In our notice of possible remedies, published alongside our Provisional Findings, we have set out more detail on options to remedy the provisional SLCs.”

If it were me, MVNOs and wholesale remedies would be top of my list. I think they will feature strongly as the parties explore options. But to understand why, we need to look at what else is on the table.

So, what is on the list, and which have merit? 

1. Divestiture, for which there are two directions 

The first is getting one of the parties to divest an asset. The CMA has pretty much suggested that there isn’t a company that could be carved off and could still trade as a separate entity. If we were talking about O2 back when they had proposed a merger with Three, then the Tesco Mobile JV and gifgaff would have been a reasonable candidate for divestiture but there are not really any options between Three and Vodafone.

However, an extremely radical (and highly unlikely) proposal could be to package up all the various sub brands of Voxi, Talkmobile and SMARTY and sell them to a third party which operates them applying MVNO economics.

It’s not as crazy an idea as it might seem, were it not for the relatively low customer numbers involved (probably less than 3million). It’s that which makes it a) difficult to justify a rebalance in the market and b) hard to find a buyer.

The other divestiture available is spectrum assets. There has been lots of talk about this and it is an obvious target. The CMA seem unconvinced that this will significantly alter the competition in the market. The merging parties have been pre-emptive, and if the merger is granted, have agreed with VMO2 (which need spectrum) that it will bring Three into the existing VF/ VMO2 site share agreement.

2. The next remedy is an investment commitment.The CMA needs to be convinced that the parties will make the investments outlined in their plan. If this goes ahead then I think this is almost a given that the CMA will seek to have some sort of binding commitment for this.
3. Retail customer protections is the next.In effect, the merged entity will be expected to honour current offers and pricing in the market for a negotiated period. This was one of the concessions made in the Channel Islands merger that Graystone was involved with, and with that experience to hand, I suspect this is something that can be easily agreed.
4. It’s therefore highly likely there will be a reliance on wholesale and MVNO remedies, with numerous tried and tested options apparent in other markets.

The first is the solution of divesting some spectrum to an MVNO to allow them to become the new fourth market entrant. We have seen this solution applied in Spain recently after the merger between Orange and Mas Movil. In fact, it was only approved subject to MVNO Digi getting access to both spectrum and national roaming agreements so they could become a credible fourth network over time.

How could this work in the UK? It would have to be a full MVNO and not one owned in a JV. So, it couldn’t be Tesco, the most obvious candidate in terms of scale. This therefore limits the options to Sky (most likely) Lycamobile, Lebara or Gamma.

In theory, there’s nothing to stop a credible and financially sound new entrant being created. But not only would that take a significant investment, we also have to remember that the whole premise of the merger is that Three cannot function and make the network investments required to be profitable with 10m customers.

With that as a backdrop, it would be a very brave organisation that takes on the market from nothing. But who knows, maybe Elon Musk, or someone similarly driven and financially able, fancies an adventure in telecoms. Nothing surprises me at the moment…

5. The next MVNO / wholesale related option is capacity ringfencingto allocate spectrum specifically for MVNOs. In the past, there have been two approaches to this. The first, used in Ireland and Austria amongst others, was to ring fence capacity for MVNOs and implement a capacity-based charging model.

In those examples, it was also coupled with bringing in new market entrants to leverage this model. However, it should be noted that those markets did not have such a vibrant MVNO market as the UK. Whilst this model is interesting, it’s my opinion that it typically requires the MVNOs to be full MVNOs, which is capital intensive. Not only that, but there are relatively few in the UK, making it a less viable solution.

A more radical solution, which was deployed in Mexico, was building a network entirely for MVNOs. Wild as it may seem, the same could be achieved using allocated spectrum and a full MVNO infrastructure either owned by a third party or leveraging the merged entities infrastructure (as they will have two of everything!).

This would be like creating the equivalent of Openreach for mobile. So, not such a wild idea as it’s been done before. But I suspect it’s a bridge too far for Three and Vodafone.

6. That leaves us with regulated pricing.On balance, I think this is the more likely option, and fits with the CMA expectations of Wholesale access terms. This could involve pre-agreed non-discriminatory wholesale terms, including prices, being made available to MVNOs, subject to a reasonable limit (number of MVNOs or network capacity utilisation).

This is relatively tried and tested in markets globally. However, the challenge is always how you set those terms. There have been many methodologies deployed in the past and not all have helped MVNOs succeed.

We should also consider that historically in the UK, wholesale deals and pricing have been 100% confidential and, because of this, published wholesale rates could cause a correction in existing wholesale deals.

What would I do? 

No one remedy is the golden arrow, but there are certainly golden threads that the JV parties, and the CMA could look at together. I think that applying scrutiny to the MVNOs and wholesale market is more likely to benefit MVNOs commercially, and therefore consumers, whether it’s a new entrant, or via existing MVNOs.

That’s where I would focus attention initially and it’s why I still think there’s a good chance of this happening. The CMA is stating a position of openness and it’s now up to the parties to come to the table and negotiate.

If this has made you think your business needs a plan fast to react to what will be a significant market event whether it is a yes or a no, then speak to us at Graystone. This is our heartland and we’d only too pleased to work with you on a strategy for success. 

The post Vodafone / Three JV – is the CMA signalling game over? appeared first on Graystone Strategy.

It’s an unstoppable multi-billion-dollar industry and you’ve followed the developments of new licenses around the world. Your analysis shows you that you could make a name for yourself in a burgeoning market.

You’ve got the intel, and the spirit and drive to be successful, but how do you get your idea off the ground quickly?

Ordinarily you’d expect me to say that you should develop a proposition, one that will give a substantial cohort of consumers something different, and compelling, even unexpected. Do the business case and speak to the operators and become an MVNO. It’s a tested model – Deliver a killer go to market strategy and through all means possible drive awareness of your brand and ultimately achieve cut through and customer consideration.

That’s a considerable commitment in time, and cash, even before you’ve started trading. Is it really possible to follow your dream?

Yes, and it can be easier and less costly if you re-evaluate what a brand is. If you set aside the concept of creating a brand, and all the complexities that comes with, but instead focus on the other core elements of running a business then you have a chance.

But a brand is the business I hear you cry. And yes, it is. But you can be a brand without creating your own. Today more and more fledging mobile entrepreneurs are latching on to the merit of licencing a brand.

I bet it’s not something you’ve considered before. It’s an option that has been quietly ticking along in the wings for some time now but came into the spotlight at MVNO World Congress in June, thanks to David Clyde, Brand Director at Lebara.

Lebara is a fascinating MVNO story. It’s now a well-known global MVNO brand, and it stands out because it’s a mobile provider that has proven how it’s possible to adapt a core brand for different markets.

Wherever you travel, the Lebara brand will be recognisable. It’s distinctive logo and uncomplicated offer shine through. Its rapid growth around the world is testament to decisively sticking to its core proposition and knowing its audience.

However, Lebara recognised some time ago that there isn’t a ‘one size fits all’. Brands don’t survive unless they make adjustments for local market conditions, language, and culture.

It’s something that Vodafone have led the way on. The brand team there, understood that a globally recognised and highly valued brand which is usually unwavering in its brand guidelines, needs to flex to accommodate local market nuances without losing the brand essence.

More critically, Vodafone has been highly successful at monetising the brand and what it stood for, by establishing a ‘partner market’ network. With this model, Vodafone allows partner markets to leverage the brand, the propositions, and the insights without technically being an operating company owned by the Vodafone Group. It’s a winning formula – partner without the cost of a network roll out and establish a brand presence in new territories with ‘relative’ ease.

In terms of how you and I experience it, it’s really quite straightforward. When you travel to a Vodafone partner market you may see familiar proposition elements including retail formats that are identical. The brand you trust in the UK is instantly recognisable, and all it stands for comes to mind just being seeing the shop front.

In this case, Vodafone is taking all the best practice, insight and trading experience across retail, proposition, brand, CVM, roaming and so on, and giving partners a way to leverage it all so they can accelerate their own commercial success and what’s more, do it with a standout brand.

It’s with this context in mind, that Lebara’s brand licensing proposition for MVNOs is so interesting. As a budding MVNO you can access a globally recognised brand and customer proposition, with the help of a team who have driven growth for Lebara globally, vastly increasing your chances of success in your chosen market, and probably adding significant credibility for those all so important MNO wholesale discussions.

Is now the time to strike?

Quite possibly.

Lebara has moved quietly and confidently with its strategy, establishing partners in Australia, Switzerland, KSA and Spain. More recently, it announced a partnership in Nigeria with Vas 2 Net, one of the Tier 5 license holders. Vas 2 Net will benefit from an established brand, exec expertise across every discipline and function, and benefit from know-how built from years of hands-on experience. This level of help is undoubtedly invaluable for any new MVNO.

It makes good sense for a start-up MVNO to go this way. As I’ve said, building a brand can be an expensive business both in terms of time and hard financial cost. I know from experience of launching MVNOs in a number of markets. In all cases, we had a trusted brand (Sainsbury’s for instance) and we were simply leveraging the brand values and customer loyalty to move into the mobile space.

For an MVNO starting out with a blank piece of paper and absolutely zero brand awareness or customer consideration, it can’t be overstated how much of a big task it is to make a name for yourself. It takes hefty marketing budgets to gain cut through.

So, why not look at leasing? It’s not just any brand that Lebara is delivering. It’s a well-established and trusted MVNO brand with impeccable smart value credentials, exactly the type of brand that any start up MVNO would aspire to be.

On top of all of that there is the unparalleled knowledge, insight, and experience that MVNOs can tap into, all of which has enormous value.

Of course, it would be naive to think Lebara will work with anyone. Afterall, it has a brand to protect too. Expect it to be highly selective about who it will partner with and steadfast to ensuring every licensee delivers against brand expectations and promises.

Brand licensing won’t be for everyone, in fact start-ups may look at Lebara, Vodafone (and others) and think that they could monetise their efforts with their own licensing strategy. It definitely gives weight to the argument to invest in building brand equity as part of an investment in the future.

With that strategy comes other options too. For instance, you could sell the brand to the MNO to create a sub brand that’s promoted in markets they believe they can grow share in.

My point is, MVNOs have more options for growth than they perhaps realised before. Just as they have a range of choices about their technical strategy and their commercial strategy, they now have some interesting choices on brand and marketing strategy too.

The reception David received at the conference, highlighted the appetite for this diversification. And the questions I was asked subsequently, show how much head scratching is already going on. I’m sure this won’t be a strategy confined to a few markets for very long. Not only should we expect to see more Lebara brand licensees in the future, but I’m certain other big MVNO and/or MNO brands will follow suit in the coming years.

If your head is fizzing with ideas after reading this, then our expert team at Graystone Strategy can help you work through the best approach for you. With over 100 years collective telecoms and MVNO experience spanning technology, operations, commercial and marketing we can help you make the right choices for your MVNO.

The post Is the MVNO future all about brand licensing? Lebara certainly thinks so. 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.

However, there’s another interesting story MVNOs should follow. For the first time in its history, the archipelago of Channel Islands is close to launching its first MVNO in the shape of Coop Mobile. Again, all subject to regulatory approval, the launch would be a remedial action in the wake of the likely completion of Sure’s purchase of Airtel-Vodafone.

Why should we care?

It’s all about the development of an MVNO market and the innovation that could come from it.

 It’s worth a few facts at this point. The islands of Jersey and Guernsey are home to 170,000 residents spread across an area of 70 square miles. Each island is independently governed and has its own regulator for telecoms.

Unsurprisingly, the proposed merger of Sure and Airtel-Vodafone has attracted regulatory attention. Principally, the merger would leave the islands with just two operators, limiting consumer choice. If you’ve watched other mergers around the world play out (think Ireland and Austria) then you’ll know that’s a bug bear for regulators. Stands to reason, a merger will be scrutinised, and why there will be reviews on competition and choice. We know from other examples that this leads to interesting proposals. That’s why Sure has put forward the launch of an MVNO as part of its remedial plan. Maintaining a buoyant competitive market isn’t about sticking with the status quo. Innovation – in the form of new licences – can steady the helm. 

Let’s look at the context.

The reasons for the purchase of Airtel are not dissimilar to those proposed by Three / Vodafone in the UK. Airtel-Vodafone is unable to sustain operating costs especially those associated to updating the mobile networks across the two islands. Its decision to exit the island will bring home the reality that it was making a loss. (I can’t imagine it was an easy brand decision to make with the ‘heart’, but I’m certain the ‘head for numbers’ had the final say.)

 Nevertheless, the sale, if approved, leaves a gap in the market. It might be considered a small gap at this stage in the game but closing it with a keen MVNO should turn that assumption around.

Is this really going to happen?

I would say, yes. There’s a good line of retailers that have taken the opportunity to join the MVNO community, setting the precedent for linking a value offer with mobile and combining the wealth of customer insight with targeted propositions.  

Having consulted the Coop team on the negotiations, I’m very excited about the prospect. By applying for an MVNO licence in both islands, Coop can leverage its considerable retail estate as a distribution channel and talk to its 120,000 members using its credentials as a trusted brand. I’m confident it can offer a compelling alternative to the remaining incumbents.

It’s not a done deal, I admit. In Jersey, the Jersey Competition and Regulatory Authority (JCRA) have launched a public consultation process giving consumers a voice on the proposed sale and launch of an MVNO. But it’s a significant step and I would hope it lands favourably. The authorities on Guernsey are also reviewing the proposed remedies from Sure.

As industry experts, we know that MVNOs have proven to be successful at driving competition. Currently in the UK, around a third of all customer acquisitions go to MVNOs or challenger operator sub brands and, historically, retail MVNOs have proven successful. Retailers are trusted, have a cost-effective route to market and the ability to innovate the proposition by aligning it with their core activities.

Tesco Mobile, the UKs biggest MVNO, has been particularly successful in this regard leveraging the Clubcard scheme and its “Super Market Mobile” credentials, similarly Asda Mobile, iD mobile (by Currys) Superdrug Mobile and even Your Coop Mobile offer are all available in the UK.

In Germany, Aldi and Lidl also operate MVNOs and we are seeing retail MVNOs as one of the more successful early entrants to the MVNO market in places like South Africa with brands like PNP (Pick and Pay) and Shop Rite Knect rated as ‘favourite’ brands these days. 

You could say that the outcome of the application for a licence is in the hands of the public. And I think that’s good. In my experience, the public will want choice and will favour the underdog to give them something the other operators can’t. Of course, the regulators need to review other aspects alongside, but I suspect gauging the public opinion will help sway the vote.

As the year unfolds, I think we should expect an historic outcome for the Channel Islands, and I’d recommend MVNOs watch to see how the move is executed. There’s a lot to learn from other markets, especially so in fledging ones.

If you’re thinking about launching an MVNO in a new market or need to drive competition with a differentiated offer, then call me. My team can help you appraise the market, negotiate the deal, and build the winning business model.

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