eSIM has been a huge talking point at MVNO conferences that I’ve chaired. Usually, the discussion has been related to predictions, and technology developments and adoption. But today’s move by Revolut makes it a leader of a trend we’ll see repeated.

Revolut is one of many brands who have seen the potential of eSIM and how it can be used to disrupt not just telecoms but its sector. Other recent brands targeting the traveller market include Easyjet and Uber. They are logical. Buy a ticket, buy an eSIM.

New MVNOs like Airalo (founded in Singapore but operating globally), Holafly (set up in Spain also operating globally) and Global Yo (headquartered in Mexico and combining entertainment too) are also in on the act.

But to see a bank take a slice of the action holds real power in terms of consumer value, and it is a true development in the market.

What’s happening, and why now?

Ultimately, these brands offer a cheaper and credible alternative to roaming with your existing mobile operator.

The idea of MVNOs providing roaming substitution is not new. The relatively high cost of roaming in 2012 meant that the GSMA singled it out as a key segment in its MVNO analysis.

A lot has changed since then, not least Brexit. When Roam like Home was introduced into Europe, into was to deal with bill shock and, as a result, the demand competitive roaming options all but disappeared.

Back then companies like truphone (now Global One and the company supplying the service to Revolut) invested significant sums, largely because it was a technically complex undertaking.

But now that technical challenge has gone. Firstly, voice and SMS for roaming are less of a ‘thing’, it’s all about the data and with the advent of OTT apps like WhatsApp and Facetime there really is no need to use your existing mobile number while roaming – people can contact you using data.

The second change is that eSIM is becoming far more prevalent.

That makes it much easier to add a data only eSIM (from one of the providers mentioned above) before you leave or when you land, or even while you’re in your Uber from the airport.

It’s simple, very cost effective and you can easily shop around for the best deal depending on which country you’re visiting.

Travel money with benefits

But what I find really interesting, is that Revolut is positioning this a benefit for its customers. And it is. It’s the killer combination of low cost and high value to the customer, making the decision to use Revolut for travel money a ‘no brainer’.

For a long time, I have theorised that industries like banking should put in place a discounted or free MVNO depending on how many banking products a customer has. It’s a useful and sticky benefit, not to mention it gives banks a route directly to the customer and probably helps with KYC and one-time passwords.

We have seen banking MVNOs spring up in Africa, a continent that boasts real leadership in ‘M money’. But not so much in Europe, and those that have launched, have always used it as a distribution-led offer, generally because they have an estate of banks.

However, today’s news shows the trend in eSIM is blowing this wide open for the digital innovators.

No surprises, but I am very excited about what we will see next. I predict a bow wave of partnerships and launches. What’s more, all this talk of eSIMs, almost makes me want to go on holiday!

If you need help bringing eSIM to market, developing your strategy and understanding how telecoms could help you monetise your existing customers, get in contact or send me a WhatsApp to +447799244962.

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Tighten your belts, pull in your horns, slash the spending. Whatever way you phrase it, reducing your marketing overheads in a recession is textbook stuff. Or is it? Does the prospect of a recession really translate to spending less on telling your story?

The post How to keep your head, and grow your business in a recession appeared first on Graystone Strategy.

Every day there seems to be a new story about how inflation, especially food inflation, is forcing people to make unreasonable choices about whether to ‘heat or eat’.

In March, the Consumer Price Index will reveal the extent of the damage petrol and energy prices have done to baskets. I remember looking at last year’s index and seeing that ‘communications’ showed a medium variation in price.

I suspect this year, we’ll see a similar story, though I do wonder if next year’s index might show a more marked increase – a reflection of the fact that operators are going to find the next year few years tough.

The energy bills for running networks will be higher than any industry veteran like me will have ever known. Add in the last two years of supply chain problems and you have just cause to put your prices up.

Cost of living wage increases: Three recently announced a pay rise for its retail employees. It’s the second it’s agreed in 12 months. As a result, Three retail employees in London have seen 16.8% increase since December 2021 and those outside London 23.7%.

This focus on ensuring staff can earn a living wage is commendable. But it needs to be paid for. Unfortunately, as with all the rising costs operators are facing, I can’t see any other option than to increase prices.

Small print comes home to roost. If you like to read the small print, you’ll know that most of the large network operators have inflationary increases in their contracts. Last summer, the FT reported on the practice of putting an ‘innocuous’ 3.9% rise plus inflation into contracts. It amounts to some fairly eyewatering increases for households.

Some people will take this on the chin, given the proportion they spend on telecoms compared to other essentials. But many won’t and simply can’t. Just a few days ago, Leeds City Council revealed that it is working with numerous community organisations to help address the growing numbers of people becoming digitally excluded as people kill the internet to free up cash for food or heating.

This reality is creating some interesting dynamics on pricing in the industry. Some operators see recession as an opportunity based on the understanding that many of the value focused operators experienced customer growth during Covid as people started shopping around. Supermarket mobile brand Tesco is perhaps one of the more well-known operators when it comes to making above the line statements about its commitment to not raising prices. But others have chimed in with competitor giffgaff saying it would freeze prices until the end of 2023..

I think it’s a sound strategy especially at a time when every personal finance editor will be reminding people that the MVNOs and sub brands, in general, offer the same network service and download speeds of their host and parent operators.

Often the only compromises people will have to make will be related to whether they are funding a handset (I predict more hand me downs within families and the refurb market getting a boost), access to additional value-added services (which many might say they can forgo for a short time) or the customer services model (apps and chatbots instead of a call centre).

Knowing where to start has always been a barrier for people. How do you compare like for like? That’s where sites like Uswitch will be invaluable. A quick five-minute search shows just how competitive it is if you only want to spend to £10:

• iD Mobile (on the Three network): unlimited calls, texts and 70GB data for £10 on a 1 month only contract. This also included 5G.
• Three came up with unlimited calls and texts and 30GB data for £9 on a 12 month contract.
• Vodafone offers unlimited calls, texts and 40GB of data for £10 on a 12 month sim only contract
• Talkmobile (on the Vodafone network) offered unlimited calls, texts and 60GB of data for £9.95 on a 1 month sim only contract.

Will everyone understand Talkmobile is on Vodafone and iD is on Three? Probably not. Is this a chance for those MVNOs to be more explicit about their network partner? Possibly. Is it worth tracking deals? Definitely. Not every operator will be using Uswitch or alike so I’d advise everyone to cover all the bases by looking at the operator websites or in store too. And bear in mind what you see today (the list above changed not long after I wrote this) will more than likely be gone tomorrow and replaced with something similar.

But the main point is that consumers need to look at what they really use, and therefore where they can make a saving. I think people will be surprised at how little data they use and hence how much money they could save in difficult times without compromising coverage or getting locked in for long periods.

Once people start looking, I also wonder whether we will see some people decide they don’t need to be paying for broadband and fixed subscriptions. In some areas of the country, 5G offers very acceptable fast speeds at some competitive rates – Who fancies £25/ month for unlimited minutes, texts and fast 5G data?

Many will be tempted by these sorts of deals and could potentially move away from the incumbents for the first time in their life. My guess is that once people start scouting for deals, they will more readily abandon their perceptions on brand. Which leaves me to believe it won’t be long before we see some big winners in the MNVO market. The next few months will really test loyalty and the operators putting up their prices need to be ready for the battle.

The post As recession looms, are consumers about to ditch their big brand loyalty in favour of MVNOs? appeared first on Graystone Strategy.

The announcements were of course all made when going abroad was far from our minds, so probably lost on the average consumer. Now there’s a little more hope of holidays. The abundance of adverts on prime-time TV emphasise that tourist operators are hoping to capture the mood with January deals, and I sense people will go for them. Bill shock will be far from their minds, but it’s a real possibility now.

It won’t have gone unnoticed by the serial business travellers, however. When big international conferences and face-to-face sales meetings are back on roaming charges will hit budgets hard.

Technical delays

Analysis in Mobile Europe this week, highlighted that reversing roaming charges isn’t that easy. Vodafone and EE have said they will need to delay their plans because of the ‘unexpected’ technical difficulties they are encountering. This has led some analysts to speculate that VMO2’s decision not to reintroduce roaming rates wasn’t a result of philanthropy but technical capability. I’d say it’s. smart comms – taking an internal disadvantage and turning it into a PR advantage.

Though roaming fees are back on the agenda, this hiatus presents real opportunity for MVNOs. It’s a change in direction that they can capitalise on and use to steal a march on the MNOs.

Don’t forget, in the past, MVNOs have had a difficult time managing roaming. Wholesale costs have always been prohibitive to them putting competitive offers into the market. With no ownership of the network, it was a very one-sided cost too. MNOs benefit from incoming and outgoing roaming costs that can be ‘netted off’. No such luck for MVNOs they were exposed on margin and revenue. To the point that Roam like Home was legislation that some MVNOs challenged and called for exemption from.

In a twist of fate, MVNOs can now exploit the situation. As I see it, there are two clear choices. 1. be a PR hero, like O2, and differentiate by shouldering the costs and attract frequent travellers who will be higher value. Or 2. do the opposite and introduce roaming charges in line with the market and recover margin they have been losing through Roam like home.

eSIM – the real genie in the bottle for MVNOs

But there is a third option – a genie in the bottle. eSIM is where the money will be. It’s ripe for making international customer acquisition a cert.

What do I mean?

eSIM makes it easy to offer great SIM only deals without the need for a physical SIM. It just requires an eSIM profile. For MVNOs based in a European country (or any country for that matter) it’s the perfect way to target the mobile customers coming for short or long-term trips for business or pleasure.

Roaming was always important to people because you could be contacted on your number. But with apps like Teams and WhatsApp in the mix who needs to know your number? The mobile number is becoming less relevant provided you have access to high quality and affordable (read cheap) data.

With that in mind it’s unlikely that every visitor will need or care about having a number. But if you do, then it’s possible thanks to eSIM which provides a local number using local tariffs. It’s quick and easy to set up, which is what travellers will want.

Given operators seem to be reticent to implement eSIM, MVNOs could win here and trigger a far faster adoption of eSIM than expected. Operators will shudder at that prospect. But in the absence of being able to compete they are setting up the perfect conditions for MVNOs to take on the challenge. Customers will discover eSIM.

I know the received wisdom has always been that eSIM makes it easier for churn to manifest. But in markets that have high rates of eSIM penetration that’s not really been the case. It’s not a given IF you get your proposition right.

I’d argue that roaming supports this eSIM ‘stickiness’ too. If I was running an MVNO in any country that gets or will get lots of inbound international travellers, I would be seriously thinking about my eSIM strategy.

Why would you not offer an easy way to download a local SIM profile with lots of included texts and data? No searching for retail outlets, no fiddly set up and no plastic – a good eco message consumers want to hear. Just a new profile on my phone that works seamlessly and makes my holiday go swimmingly wherever I am.

Holidays will feel like a luxury, especially given the economic context households are managing right now. Every penny for hotels, flights, excursions, food and drinks will be scrutinised. Which is why I say, that for the MVNOs that can take some of the bill shock out of the equation, it will be piña coladas all round.

If you want help developing an eSIM strategy, then get in touch. I can help you design propositions for your target customer that will stand up to consumer scrutiny and win brand loyalty.

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One question I’ll be posing is whether MVNOs are really thinking through how customers are acquired and managed when the operator model depends on the use of digital platforms? The answer may seem obvious: simply build the comms channel into the apps and service models you design and launch.

It’s true that traditionally, conversations with customers have been led by customer acquisition teams supported by a great app or online UX experience. But I worry that just because the mobile industry has always done it that way, there’s an assumption that MVNOs must follow the mould.

I’d go as far as to say that MVNOs have to take a step back to survive the war on customer marketing. Customers like to use WhatsApp, Facebook Messenger, video. Some still like email and SMS. Customers might use them all every day, some might use a few. It proves no two people are the same.

We can’t assume a postcode, or a demographic profile informs how people will behave, shop, buy and request help. Everyone will interact with a brand differently depending on how they run their day-to-day life, the demands on their time, their income and prospects, and their communication preferences. And given all the different ways of communicating today, it’s genuinely surprising that the incumbent operators are still using email and SMS – I know because I’m always so surprised to receive a text from my provider!

MVNOs need to take a different view if they are to win share. Service models need to be organised differently.

This thought process has been confirmed during my time working with a Communication Platform as a Service provider (CPaaS). Fundamentally, telcos are falling behind other sectors like retail and are ill-equipped for having conversations with customers in a way that fits in with their life.

Persisting with text messages is not only out of sync with how I want to do busines but prompts another thought: SMS is easy and cheap to send so is this company really investing in getting their comms right and do they ‘get’ me?

I use WhatsApp, I use video, sure I still use voice, but I am ‘old skool’ as they say. But I also know I’m not alone. Plenty of other people are using this mixture of communication tools too. In the UK, 70% of people are now using video weekly, the biggest growth being in older people. Around the world 3.8 billion messages are sent over internet messaging platforms each day.

You can’t ignore stats like that if you’re a MVNO, especially as for most MVNOs, the core proposition is always focused on highly targeted and segmented bases. MVNOs need to put themselves in other people’s shoes. How do their customers talk to friends? Using that as a starting point can be so powerful in terms of developing not just a communications strategy but an omni-channel one.

What do I mean by that? Take Rich Communications Services (RCS) as an example. It allows brands to send a message that’s interactive. So, you can send a rundown of the best new handsets that customers can swipe through on a carousel and buy instantly, include links to start a chat with a chatbot on pricing (with the option to pass the customer on to a person), or include video content with a phone review. In France, where retailers are using this technique in Christmas campaigns engagement can be as long as three minutes!

The beauty of CPaaS means that companies can use a blend of communication methods but still have a single view of the customer. Whether they use What’sApp, Facebook Messenger of RCS to send the message, they can also see in real-time the levels of engagement campaigns are generating and adjust the tactics and content accordingly. Plus, they have the insight to plan future offers and campaigns more precisely. In turn, engagement scores and conversion rates improve, and operational over heads reduce.

I’ve always been a big believer in taking a different approach to segmentation but immersing myself in the world of CPaaS has been a real eye opener. It’s helped me see there are new and exciting ways of using marketing tech while reminding me of my deep-rooted love for effective targeted marketing.

I hope it won’t be long before we see communication platforms being used by MVNOs and sub brands via an MVNE. I’ll certainly be recommending it to those I work with because I think if they did adopt the approach, they’d see a fast ROI.

Overall, my lasting impression of this world is that any brand that remembers customers are not a homogenous group will not just win market share but also hearts and minds.

If you fancy a chat about who is doing it well and why, or any of the other hot topics that the symposium will cover, why not drop me a message?

The post Are MVNOs missing the point on customer comms? appeared first on Graystone Strategy.

As reported in This is Money, the strategy includes selling mobile broadband to home workers who have moved to more rural locations and need reliable connections, and gadgets and devices made popular by the pandemic such as film projectors.

Robert Finnegan, Three’s CEO, said they are not going after the Curry’s market but it’s certainly a strong statement of intent that there’s a market to be had.

It might also be making a few analysts scratch their heads – Is it flawed logic or complete genius? So many brands that have played in this market have left the high street in recent years. CPW was the latest casualty so investing in a retail footprint will have mustered some courage.

That seems to have been fuelled by a trial in Ireland. Trials are always sensible when making such a bold move. But from experience of working in Ireland, I can testify that the Irish market is very different to the UK’s. Plus, the Three market share is greater in Ireland which could skew results.

Even so, selling broadband connections is sensible. Both Carphone Warehouse and Vodafone moved into the space. They had big customer bases and wide-ranging segments to work with. Vodafone reported figures this summer of 940,000 connection[1], with 467,000 of those converged. However, could the pandemic have had an influence on things? Do we need to see a ‘normal’ year to know whether it’s been a real success?

The move to broadband is sensible and fits with the Three portfolio that’s centred around selling services. Plus, as we know, acquisition in the air. Robert has said they are looking for the right brand to come along. When you consider Hutch has the financial muscle power to help, diversifying the portfolio might not be such a risk. Rather it’s a move that is complementary to the products and services that the short list of targets sells.

Whatever the planned outcomes, this needs to be a success. It’s not a cheap exercise and converting the strategy to revenue will be watched closely.

Certainly, there’s a big challenge ahead in terms of re-positioning the brand from one that sells to individuals, to one that sells to families and households.

Reinvention is not impossible by any stretch. The insight they gathered in Ireland will be providing the impetus to suggest it can make the move. But whether Three can make it happen in the UK, and in quick time, to compete with the established players remains to be seen.

[1] https://www.ispreview.co.uk/index.php/2021/07/vodafone-uk-reaches-940000-fixed-broadband-isp-customers.html

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But it seemed to pose more questions than it answered, not least for iD Mobile, the Dixons Carphone MVNO.  The team there had to put out a statement to confirm that the deal doesn’t impact the iD brand or its agreement with Three, the network behind the MVNO.

Of course the big question is why Vodafone, and why now?

Over my wholesale career I’ve had dealings with both of the brands and I can see a plan in play. Yes, you might think this is a last throw of the dice from Curry’s but actually it’s savvy on the part of Vodafone.

Why’s that? On the surface, you could argue that Vodafone had exclusivity already. All the other operators had abandoned Carphone Warehouse, which had significantly impacted its ability to offer impartial advice.

But you have to consider that Vodafone is likely to be playing a long game. Firstly, it knows from experience that this channel has the potential to drive connection volumes and there is no doubt that the Currys brand still captures a lot of footfall and web traffic.

Secondly, in its distant past it left CPW only to return later. The press coverage back then asked if the brand would last. It clearly did. And that’s why Vodafone’s strategy is so interesting. Could the exclusivity be a smart way to ensure others can’t get in if the channel continues to perform? I’d wager the conversation has been had.

Then of course there is the brand and product fit. Curry’s customers are likely to have more in common with the Vodafone core consumer demographic, and when you factor in the Vodafone ‘V’ smart devices you can see some real synergies. It certainly makes more sense as a retail partnership than the retail trial O2 announced with Next back in 2019.

And speaking of the long game, let’s speculate for a moment that maybe Vodafone is thinking that over time it may be able to win the iD MVNO business. It certainly measures up well. It has a substantial customer base and is proving its value in the market. It targets a different market to Vodafone so passes the incremental customer test any MVNO goes through when being assessed by an operator. It would also give Curry’s customers another choice.

Those with you that have been around a while will remember that Vodafone and CPW had an MVNO in the past. So this deal, and recent market statements that confirm Vodafone’s commitment to MVNOs, makes me wonder if they could mount a bid to win the iD business from Three when the contract is up for renewal.

iD’s statement would suggest otherwise, plus there’s Voxi, Vodafone’s youth sub brand, to consider. Though we don’t know the full details, if the exclusivity deal includes Voxi then that presents genuine competition for iD and means it could potentially lose customers in the Curry’s channel.

I can’t see anything radical happening tomorrow, or even by the end of the year. But I wouldn’t be surprised if there’s more to this than meets the eye and we find ourselves analysing more exciting moves with these brands in the future. For now, there will be much to do to make the new partnership work and hit the numbers.

My overall sense on this is one of encouragement – it’s good to see that telecoms is still important to Curry’s, and there’s long-term intent to make its mark in the market. And if nothing else, it continues to give consumers choice, shareholders optimism, and provides relief for iD.

Do you have questions about the deal? Think you need to run a strategic review or recut your segmentation as a result? Drop me a line, I’m happy to give you my perspective and some strategic counsel.

The post Is Vodafone’s exclusive deal with Currys designed to keep others out when the market picks up? appeared first on Graystone Strategy.

Each operator is different but it seems new and upgrading customers to brands like BT and EE will be most impacted. They will get charged a fee of £2 to use their minutes texts and data package across 47 European destinations. It’s likely to cause real annoyance on top of everything else travelling abroad conjures up at the moment.

Yes, there are alternatives like using the hotel WiFi or buying a local Sim or even ESIM if data is essential, but generally consumers will be annoyed they have to do this in the first place. That said, I think we’re likely to see some innovation here, as companies tap into the indignation caused and seek to make money by competing head to head. I’m sure more services like https://www.airalo.com/ will pop up.

On the flip side, for my MVNO clients there’s real opportunity. It reverses their fortunes.

By their very nature, MVNOs don’t have the luxury of their own networks, but their consumers still want to roam. When the Roam like Home legislation disallowed charges for EU roaming, MVNOs had a substantial cost risk and no associated revenue. It forced them to include roaming minutes, texts and data in their bundles. This roaming traffic was charged wholesale at a premium, and the MVNOs had no way of recouping the costs. In fact, it was so problematic that some MVNOs applied to be exempt from the legislation.

In a twist of fortune then, UK MVNOs may well be breathing a sigh of relief and can legitimately go back to the original model and charge without making any loss. So, as travel starts to open up, their options to build propositions, which can add extra margin from roamers, or at least mitigate the roaming costs, also open up.

But, and it’s a big but, there is a looming sting in the tail. One of the other “benefits” of Roam like Home was a regulated intra EU wholesale rate. As the UK is no longer obliged to follow Roam like Home, so there’s the potential that host operators may increase these charges for UK MNOs and MVNOs. Once again cost will be back on the agenda for MVNOs.

Of course, in the last four years, MVNOs have worked out roaming cost mitigation. They’ve had to, and because it is such an emotive issue for them and for consumers, they may well choose to continue to offer Roam like Home style offers on the grounds of brand differentiation. If they can find ways to make roaming more palatable compared to the MNOs I think they will.

But they need to get it right first time. So my suspicion is that MVNOs will do one of two things 1. watch to see how consumers respond and then develop their propositions or 2. make a big play on not charging at all. Either way they have to have a good handle on their customer segmentation. Understanding the types of consumer in their base, which could have changed over the last year, and their propensity to want roaming as standard or as ‘bolt-ons’, will be very worthwhile.

But essentially, it all adds up to having a plan, and I believe the sooner they get one in place the better. Even if the plan is to do nothing.

If you need help weighing up the options and developing your mitigation strategy then pick up the phone. I can help you assess the market, whether it’s good to be a leader or a follower here, and the way you can build brand kudos with consumers as a result.

The post Roam Like Home No More – the MVNO perspective appeared first on Graystone Strategy.

To think Britain no longer has an independent large brand for mobile sales on the high street seems unthinkable. But it’s happened. Once the brand than operators fought so hard to get in with is now lost and forlorn.

The writing has been on the wall for a while. Networks have filed out the door. Branches have had to close, the Irish operation pulled altogether.

My immediate thought was for all the people who now join the job market. And I hope operators, distributors and vendors will see the value they can bring to their operations.

For consumers this is bad news. It’s bleak on the high street. There’s now next to nothing in terms of choice for consumers. The few electronic retailers that there are pose no real threat to the operators. Customers won’t have an easy task of shopping around especially if they are the high percentage of people who still like to touch and feel a real phone before making a decision.

You’ll also have to weigh up the sales pitch – four operators each with different and conflicting sets of advice. Of course we all know CPW wasn’t truly independent given the sales incentives and targets. But in its heyday, it did offer relative impartiality and give consumers space to make a choice.

Looking at the market now, it’s my opinion it won’t be long before Curry’s winds down its mobile category. It’s not really got the right ingredients, environment or brand, to appeal to the more mobile savvy consumers who probably still prefer some specialist assistance. It’s top of mind for the latest Samsung washing machine not the latest mobile.

But as an MVNO expert I have to also turn my attention to what it means for iD Mobile. It was a great business at launch and gathered pace well. But now, it’s likely to face the challenge of dramatically reduced customer acquisition. I expect there’s a frantic look by management going on, assessing how other channels to market, be it online or other retail partnerships, can shore things up.  Could it exit altogether? Don’t bet against it. Today’s news is a reminder of how tough things can get and the tough decisions market forces provoke.

And as for Currys? Well sadly it wouldn’t surprise me at all to see it going the way of Rumbelows and Comet. Yes, remember them? It’s a brand I hold a lot of affection for having been a store manager for Currys, Dixons and their CPW competitor The Link – a brand Curry’s exited from about 20 years ago. But it’s going to take a huge amount of effort to salvage.

It’s all a reminder that having a clear brand vision and focus on specific customer segments, as well as innovation in service is absolutely essential to thrive and grow.

If you’re interested in discussing what this means for your company, or need help with segmentation, and/or operational turn around drop me a line…..

The post Carphone Warehouse, death by a thousand cuts appeared first on Graystone Strategy.

Six main themes came from my thinking and, in short, if you are in mobile then there are some positives to grasp. Innovation, investment and income are very possible despite the backdrop.

1.Is mobile recession proof? Not entirely but telcos by their nature of being subscription businesses are insulated to an extent. The last few months have shown that resilience comes from continuous regular revenue. Without understating things, the majority of revenues have not dramatically changed by new acquisitions – at least not for the established players.

In terms of parallel industries, Disney+ hit the market just at the right time. It’s now got 57.5 million subscribers ‘far exceeding what was predicted’. That’s undoubtedly been helpful for Disney when other parts of its business have slowed or paused entirely this year. It made for a much better earnings call than anticipated.

But what’s interesting is that this stability in subscriptions from long established players has sparked other businesses to think subscriptions too, and without the need to become a full blown MVNO. Look at Argos. It now sells SIMs to online customers with the credit checking built in. It adopted clever plug-in APIs from CTech and Experian to do this and I think it’s a trend we’ll see continue. You no longer have to be an MVNO to get regular income – you can get a slice of the operator revenue and improve margin on the handset sale.

2. Are margins a worry then? Not really. We may see that margins decline slightly or flatten. This will largely be related to reductions in spend as companies furlough and/or cut back on marketing. Plus, operators don’t have the high acquisition costs right now as the shiny new smartphones are in shorter supply with many anticipated launches delayed. Overall, I wouldn’t expect a massive hit to mobile network margins unless they were over-reliant on enterprise revenues from industries hit by lockdown such as retail or hospitality.

3. What about the smaller outfits? My answer is get ready for acquisitions. Some smaller companies that don’t have large retained bases or were struggling pre-pandemic will have suffered and they may make good acquisition targets. The recent ruling in Europe on CKH and the O2 merger (and subsequent appeal) hints that the European regulators are worried about consolidation. But at a local level, governments are likely to support anything that saves jobs and supports the economy so I would expect to see acquisitions waved through.

4. Is there going to be any spending for growth? Yes, and my money is on a global upturn in innovation. If at the start of the year you had told a COO that they would have to move all of their call centre teams to work from home it would have been tabled as an 18 month transformation project. Yet everyone did it within a few weeks when the pandemic hit and service levels, after an initial blip, were largely maintained. It’s one example of the numerous projects companies undertook to stay operational. A huge amount of innovation and digital transformation happened so it’s now legitimate to ask the question ‘why wait?’ or ‘why can’t this be done in a fraction of the time?’.

New technology adoption is far more likely now too. There will be an appetite for making things easier, faster, more reliable and solve problems that we have to face up to for the short- to mid-term. IoT solutions a case in point. They will be adopted on much larger than anticipated scales for routine process, not just the future world stuff. We’re talking things like security gates that check your temperature. A prime example of where necessity is the mother of invention.

5. Is investment for a scale-up too optimistic? No. With this context VC funding is still going to happen and the prime candidates are those start-ups in the wider ecosystem that are leading the effort to solve world problems. With the right management teams in place they will be seen as a safer bet. VCs may even go so far as to step in and support businesses that have developed great IP but are struggling to grow, if they think the underlying economics can be fixed.

6. Should we look beyond the borders for opportunity? Yes. In less developed countries, where people had less opportunity to access the digital tools that smoothed the impact of the pandemic, I would expect to see targeted investment. The sort that focuses on extending digital networks to make the economy more resilient.

For instance, this is likely to be done using tower companies rather than through individual operator infrastructure investments. We have seen some interesting collaborations to increase coverage both at an operator and government level eg relaxing some regulations. Expect to see more of this ‘flexibility’ to help keep economies connected and on the world map. The same also goes for IoT innovations – smarter agriculture could really take off now that the precarious nature of supply chains has been exposed. If you’re in that market, or indeed smart cities, then there are definitely options.

If you need help to develop your business network and your pitch so you can speak to the right people about your innovations and ideas then get in touch.

This blog was inspired by comments provided to Capacity Magazine this week – you can read that piece here

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