Multi-play: An MVNOs’ market for the taking

In the last few years we’ve seen significant change in the multi-play arena. The proposed merger between Virgin and O2 being one of the biggest announcements we’ve seen. It would lead to a blend of complementary strategy – a mobile network meets fixed, providing households with everything they need to work and keep themselves entertained.

A while back TalkTalk walked away from its mobile multi-play strategy and one has to wonder if it’s a decision it regrets. I say this because, multi-play has been the star pupil in lockdown. Never before was a subscription to keep children entertained so needed. Netflix, Sky, Amazon Prime all carved a relevant place in the home and the gaming industry boomed. But it was companies like Sky that delivered mobile, fixed and TV content on one bill to its existing and new subscribers that delivered real value. It gave people an instant solution on one bill.

Looking to the future we’ll undoubtedly see more of this model in use. Is it possible that Disney’s Disney+ launch is a tantalising glimpse of this future? If it can deliver exceptional value and create a sticky brand, then there’s the opportunity to branch out and deliver more services under the brand. It may not have worked out that way in the US, when it attempted an MVNO but all markets are different.

Now with the advent of 5G, consumers have more choice about how and when they access services. A 5G router releases the shackles and you can get instant access to the TV shows you love and move house and take your entertainment with you.

Graystone Strategy research underlines how important this flexibility and choice is. The pull of a fully connected home is encouraging consumers to consider buying other ‘subscription’ services, like their energy, from a single provider. If you have no time and like simplicity then it stands to reason you’d want to get everything that keeps your house ticking from one company. Especially if it’s with a brand you already trust to provide you with other services.

Of course, this isn’t a one size fits all approach. Some consumer segments are more progressive in their thinking than others. For instance, some people like technology not because they are young or old but because it is an important part of how they live their life. There are people from all social backgrounds, a wide range of income brackets and age that are happy to self serve because it saves time or money. Yet there are others who want a person on the end of the phone because they don’t want the risk of something going wrong. That’s a reflection of their disposition not a generational trait.

At Graystone Strategy we have taken the findings of this attitudinal research and developed an easy to use segmentation model. In some instances, such as with Nova in Greece, the model has been tailored to help MVNOs and MNOs identify their segments and go on to build propositions specifically for them.

It’s a model that works beyond mobile too, being used in electronics retail, utilities, and grocery markets. By providing these clients with a better understanding of the needs and motivations of each attitudinal segment we are giving them a licence to cross sell products and increase the amount a person spends with them.

The numbers speak for themselves, and certainly give CMOs something to think about. In general, 74% of people would take multiple services from the same provider. That’s good news if you are thinking of increasing your portfolio.

But things get really interesting when you get sector specific. For instance, almost half of the population would consider buying mobile from their broadband provider and a quarter would buy gas or electricity from their broadband provider. Conversely, a quarter would buy broadband from their energy provider. And interestingly, a third would buy pay TV, and 20% gas and electric from their mobile provider.

With numbers like these, rethinking your segmentation seems a no brainer, yet very few companies are doing it, which is why I think it’s an opportunity for quick witted MVNOs to become broader multi service providers

There’s an unspoken reluctance to completely ditch the age-old approaches of targeting by age, postcode or value spent with the company in favour of attitude. You can’t put your finger on attitude so easily. Plus, with limited budgets and skills it’s hard to develop internal segmentation models to make such a bold switch in approach pay off.

But it’s clear from our application of the segmentation that only when you understand your customers attitudes and motivations can you offer what they want and build a strong brand with values people will trust, and ultimately grow your business. It’s the reason why Utility Warehouse has been so successful at selling gas, electricity broadband and mobile. And they must have confidence that the model will sustain as they have signed up to another 5 year contract with their host network BT.

What’s more it’s very clear that the approach doesn’t just help you reposition your existing products in the market, and who they appeal to, but it can help you determine new ones. Those could be completely new, bespoke offers for a specific segment, or as the research shows, bring additional tried and tested services like telecoms, pay TV or energy to your existing customers. Which takes us back to making multi-play relevant.

When it comes to multi-play this approach helps to identify how many services your multi-play offer should run to, or indeed if it should include any at all beyond your core offering. And most important of all, it determines which customers you should speak to about it, and which should be left to enjoy the current services they buy from you – Technology Trailblazers will buy many services, Settled Seniors won’t be so inclined to.

Bottom line is that there’s lots to gain by being more specific through attitudinal segmentation. Customer attitudes towards brands, and their loyalty to them, are changing – the research is evidence of this. But with 5G landing any MVNO that acts quickly to review its segments and propositions could steal an early share and make a name for themselves in a way they couldn’t before. MVNOs have everything to gain. They are agile, innovative and progressive. It’s this mentality that brings them success and I believe 5G could be a way to catapult the sector to new heights.

If you would like learn more about multi-play research trends, the market segmentation and how MVNOs can capitalise on it all then please contact us. And if you are curious to know how it works then you can take our segmentation test which will tell you which segment you fall into. You’ll also receive a sample of all the information we hold on that segment.

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James Gray

Managing Director at Graystone Strategy

James has over 20 years of experience working in the telecoms and retail industries. He is an expert in subscription-based business models, CRM, direct and indirect channel management and major proposition development and launches. He has held a number of Marketing Director and Consumer Director roles.