From the explosive growth of travel eSIM services to retailers such as Lidl exploring the launch of up to 30 MVNOs across Europe with 1GLOBAL, and digital-first brands like Monzo and Klarna reportedly considering market entry, the future looks bright.

Latest market data reinforces the optimism. Prescient Strategic Insight predicts the global MVNO market will grow from a value of $92 billion today to $155 billion within the next three years. These figures highlight not only the scale of the opportunity but also the pace of innovation and entrepreneurial ambition that continues to drive the industry forward.

Regulators play a significant role

A significant factor behind this expansion is the role regulators are playing in fostering competition and encouraging innovation.

In developing telecommunications markets, where greater consumer choice is needed, regulators are increasingly issuing licences and mandating wholesale network access. 

These measures help create opportunities for new entrants while challenging incumbent operators to sharpen up their efforts and deliver better services, lower prices, and more innovation.

The same trend is evident in mature markets. As network operators continue to consolidate through mergers and acquisitions, regulators frequently look to MVNOs as a mechanism for preserving competition. 

Across several European markets, regulatory remedies have included mandatory MVNO access agreements and, in some cases, regulated wholesale commercial terms. Regulators understand that a well-executed challenger MVNO can transform market dynamics and deliver significant value to consumers.

A compelling example is Walmart’s Bait in Mexico. By leveraging its extensive retail footprint and integrating mobile services with customer loyalty programmes, incentives, and promotions, Bait has achieved an impressive 18% market share. Remarkably, it has surpassed two established mobile network operators in the process. This demonstrates the power of combining a strong brand, customer access, and a differentiated proposition.

Innovation is also emerging in other areas. Honest Mobile, for example, has addressed one of the most persistent frustrations faced by UK consumers: inconsistent network coverage. 

Its solution allows customers to access multiple networks through a single SIM, providing greater reliability and flexibility. It is a simple yet highly effective response to a real consumer problem.

Beyond consumer-focused offerings, there are numerous success stories in the enterprise sector. MVNOs are increasingly being developed to support innovations in IoT, connected devices, and wearable technology. These specialised providers demonstrate that MVNOs can take many forms, serving a wide range of customer needs and business models.

But what unites these success stories is a shared mindset. A belief that existing solutions can be improved. By identifying genuine market gaps and delivering something better, many MVNOs have managed to challenge incumbents and reshape customer expectations.

But you need more than a good idea to succeed

However, having a strong concept is only the beginning. While innovation is essential, it is far from the only ingredient required for success.

Launching an MVNO is a complex undertaking that involves significant commercial, operational, and technical challenges. Successful providers invest heavily in understanding customer behaviour, negotiating competitive wholesale agreements, and designing robust technical architectures capable of delivering on their promises. None of this happens by accident.

The challenges do not end once the service launches. Attracting customers and maintaining momentum in the market requires continuous effort. The idea that simply building a product guarantees customers will come is one of the biggest misconceptions in the industry. Successful MVNOs are restless when it comes to keeping their brand visible, relevant, and compelling.

Travel eSIM opens a new world of MVNO

One of the most exciting growth areas is undoubtedly the travel eSIM market.

Travel eSIM propositions are now being adopted across travel, transportation, retail, and fintech sectors. Their appeal is straightforward: they provide international travellers with simple, affordable connectivity while eliminating expensive roaming charges.

Consumers increasingly view connectivity as an essential travel product, purchased as easily as hire cars or sangria. Travellers actively compare providers and seek the best value, creating opportunities for brands that can deliver attractive, easy-to-understand offers.

The most successful propositions often combine connectivity with complementary travel services. Bundling eSIM packages with competitive foreign exchange rates, digital wallets, or airline bookings creates a seamless customer experience that adds genuine value.

Perhaps more importantly, travel eSIMs serve as an ideal gateway product. They offer new entrants a relatively low-risk route into the telecommunications market while solving a clearly defined customer pain point. 

Once a brand has established trust and demonstrated that customers are willing to buy connectivity services from them, it creates opportunities to expand into more sophisticated primary SIM offerings.

This phased approach enables brands to build customer relationships, refine their propositions, and gradually increase lifetime value. It is a model that we strongly advocate and one that many of our clients are successfully pursuing. 

Even traditional mobile network operators are increasingly investing in travel eSIM solutions, further highlighting the strategic importance of this segment.

Being a winner takes time and energy

For every successful MVNO, there are numerous examples of businesses that failed because they focused on the idea rather than the execution.

Success requires strategic clarity, dedicated resources, and expert guidance throughout the development process. The most important question any prospective MVNO must answer is simple: Why would customers choose our service?

The strongest MVNOs succeed because they solve a genuine customer problem and clearly communicate how their solution differs from existing alternatives.

At Graystone Strategy, we encourage new MVNOs to follow a five-part structured development journey that begins with customer needs and user experience. Without a deep understanding of customer motivations, there is no viable business case. It becomes impossible to accurately forecast costs, margins, growth potential, or operational requirements.

Equally important, operators are unlikely to engage in meaningful wholesale discussions if the strategic foundations are weak. Network operators receive countless partnership proposals, and only those supported by clear commercial logic and market demand stand out.

The subsequent stages we recommend focus on technical delivery and operational execution. While technology is often the most visible aspect of an MVNO launch, it should never overshadow the customer proposition. The best technical solutions are often those that create the simplest and most seamless user experiences.

Always be selling

Finally, long-term success depends on sustaining brand relevance and continuously acquiring customers. Too many businesses underestimate the ongoing investment required to market and grow their proposition. Building awareness and maintaining momentum should never be an afterthought.

This is where expert advice can make all the difference. If you believe you have identified a market opportunity, engage with industry specialists early. Validate the concept, build the business case, and refine the strategy before entering negotiations.

Better still, bring experienced advisors into wholesale discussions and contract negotiations. Their expertise can significantly accelerate the journey to market and improve commercial outcomes. In a sector growing as rapidly as MVNOs, that investment could ultimately determine whether you become part of the industry’s success story or simply another example of what happens when opportunity is not matched by execution.Need help ensuring your idea doesn’t fade after launch? We can help, either with our detailed masterclasses on the steps you need to take, or by becoming an extension of your team, developing go-to-market strategy and proposition development. Contact us to find out more.

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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. 

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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.

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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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It’s actually quite extraordinary to think how far travel eSIM has come in such a short time. In 2017, MVNO World looked at eSIM as a disruptive technology to watch. Now the scrappy challenger designed to encourage customers not to roam but to get better value through downloading a local SIM, is a real contender for differentiation. 

Market primed for growth 

By 2028, travel eSIM spend is expected to grow from €3.1 billion to nearly €7 billion. The big catalyst to it going mainstream, is largely due to the digital platform advances that MVNOs pioneered. You know they’ve done a good job when the networks invest in digital to keep up. 

MNOs couldn’t ignore the fact that customers have been embracing travel eSIM all over the world via banking, retail, and travel offers and, in part, thanks to the shift in handset design. In pure facts and figures, some 67% of consumers will consider travel eSIM as an alternative to their current solution for accessing data when travelling. 

And, anecdotally, enterprise users are using travel eSIM too. It’s perfect for those keen to keep costs down and avoid some of the quite extreme roaming charges and bill shock incidents we have come to see in the news (everyone has an example).

Is this the death knell for independent travel eSIM?

Clearly this has started to hurt the big mobile network operators, with the irony being they are offering a challenger to their own roaming business. It’s no doubt it’s a calculated move as customers are rejecting high costs of using data abroad with their home network.

Does this sound the death knell for independent travel travel eSIM providers? I don’t think so.

Firstly, many of the providers are selling the service under their own brand as part of an extension to existing services customers use before they travel. Airlines, travel insurance companies, travel agents and foreign exchange travel money companies can wrap the service into their user journeys and sell travel eSIM add ons for travellers. 

This gives them the upper hand as they will understand consumers’ travel plans in advance. eSIM can be sold months before the trip when the customer books flights, accommodation and airport parking. Whereas the mobile network only knows the customer is travelling when they land. It’s therefore a great value added service to sell, and the travel company gets multiple opportunities to remind customers to buy a SIM ahead of departure.

Secondly, as Revolut has done very successfully, the costs can be blended across all those services allowing free or heavily discounted offers. What’s not to like?

Thirdly, there is a customer perspective to consider. Yes, the networks are trusted brands, but the customer perception is they are the reason why they have had to take a travel eSIM in the first place. To put it bluntly, customers feel they have been ripped off on roaming so, I think, they will be less inclined to hand over their money to MNOs, even if it is for a cheaper travel eSIM solution.

Obviously what Vodafone has in its favour is high equity brand trust, and the benefit of digital investments that allows it to see when customers pop up abroad, and trigger an offer for a more cost effective solution.

That said, I still think it’s a bit of a stretch for customers. In the short term, it means customers will become more aware of travel eSIM and its value, and see that they have more choice. 

Consolidation on the cards

However, I do think we will see significant consolidation in the travel eSIM market over the next three to five years and probably some acquisitions. Who knows maybe the MNOs will be doing some shopping for a partner with scale and relationships as we speak. 

That’s something to think about – if you’re an MVNO, do you take advantage of more hype in the market and grow to compete, or do you scale for a sale? Big questions that need to be answered soon, I suspect. 

If you are a brand considering a travel eSIM proposition, a network working out your response to travel eSIMs or a travel eSIM provider wanting to work out how you survive and thrive through consolidation, then get in touch. Our team has experience of working through all scenarios and can get you on the right road with truly independent advice. 

The post Voda’s Travel eSIM has landed – will we see eSIM consolidation appeared first on Graystone Strategy.

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.

Their point was that MVNOs don’t have a structure for putting forward a proposal to an MNO. Much of that has to do with commercial naivety. But a lot has to do with the core proposition.

Fundamentally, when you approach an MNO you must have a clear story about why you are in business. Yes, you intend to make money, but how will you change the world? Why should we care? Can you articulate how you will attract customers, and explain how you will keep them?

Our opening class today was on differentiation in crowded markets. Erick O’Connor and I set out the ingredients for success and highlighted the brands getting it right from Better Life, through Redbull, to Equitel. They have answered these questions above brilliantly. And based on the feedback we received today, it’s important any MVNO in its infancy, or for the brands thinking of branching out, take note.

Get your story right and you’re halfway to getting a deal. It puts you in a stronger position to put forward realistic forecasts on what you will achieve, by when, and how you will add to the MNO’s incremental revenue.

So, what 10 things make up the story?

Target a specific customer segment or niche. This isn’t ‘target millennials’. Rather it’s to target Formula 1 fans, or target students living abroad. Know this segment inside out – what makes them tick and how can you appeal to their lifestyle?

Leverage Your Strengths. Got a retail estate? Use it for distribution. Have a loyalty scheme? Use it to win your first customers. The point is, you will have assets that others don’t and ones that can lower your cost to market, or make you stand out from the crowd.

Solve a problem. Can you lower someone’s monthly outgoings so they have more to spend on life’s little luxuries? Can you help people pay one bill for all their utilities? Can you help a council keep track of its assets across the city? Give people the answer.

Communicate to your customers. Don’t assume that if you build it people will come. They won’t. Instead have a simple message and keep it consistent, and repeat it, repeat it, repeat it.

Differentiate the customer experience. If your target customer typically communicates online, then an in-store service model probably isn’t right for them. And vice versa. If you use a digital sign up process, make it three clicks not 54. If you get it wrong, then all the effort to communicate your brand is worthless if the experience is poor.

Use price cuts sparingly. If cutting price is the only way to attract customers at the expense of margin, then you have a fundamental problem with the position. Make sure the value you offer goes beyond price.

Don’t be a copycat. The MVNOs that thrive, offer something people want, and no one else offers. Know your target market size, the potential share you can take – you’ll have more realistic growth forecasts that an MNO will take seriously.

Keep it simple. Don’t be tempted to launch all your ideas at once. Build traction with the core proposition and then add the extras that will help your brand evolve.

You’re a marginal business. Any promotion or change to proposition needs to modelled according to your wholesale model and the insights on trading to date. Cost everything carefully.

Don’t launch and leave. Invest always. This doesn’t need to be costly above the line advertising. It can be a more economical investment in selling more to existing customers or giving them more value.

These tips are part of a series of masterclasses that look at differentiation, agreeing a win-win deal with an MNO and commercial modelling. The classes were included in the delegate pass thanks to sponsorship by Pendula and .

Over 200 people attended the sessions. If you weren’t there but think your team would benefit, then drop us a line. We’d be happy to deliver a class to suit the skills gap you need to close.

The post I wish all MVNOs did that – 10 ingredients for winning a deal 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. 

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