It will happen on a financial scale we’ve not witnessed before. The £11bn investment makes it one ‘of the largest privately funded infrastructure programmes in the UK’. Aside from delivering all kinds of speed benefits, it’s expected to remove a total of 16,500 sq/km of ‘not spots’.

This is of course great news for consumers, especially those who are crying out for consistent, reliable coverage in more rural areas. High speed networks will also be pivotal to businesses that want to harness IoT, AI and all the applications that underpin a more productive workforce.

The plan to deliver the ‘fully funded, regulated, and guaranteed’ network will be music to the ears of the regulator as it meets the reasoning for waving the merger through. 

It will take a while to complete the mammoth job, but all credit to the team – they are out of the blocks fast. That will also be reassuring to the government, which will be glad to see up to 13,000 jobs are plumbed into the plans.

However, there was no information about how the network improvements will benefit MVNOs. The release made no reference as to how or when MVNOs such as Asda, iD, Gamma, Lebara will gain. Clarification from the press office, however, confirmed they will benefit but it’s not going to be immediate.  

When VodafoneThree does deliver parity, then it will be great news for consumers using the MVNOs. But if it takes time, or if there are technical challenges, then it could trigger some difficult conversations between VodafoneThree and the MVNOs as they will rightly demand parity of access. 

One of the positives for consumers is news that the multi-brand mobile strategy will continue. Vodafone, Three, VOXI, SMARTY, Talkmobile all endure.

This suggests the new entity thinks each of the brands is sufficiently differentiated to hold its own in the market. I did expect some adjustments here, but I suppose it could be argued that there is more to lose by cutting them.

Keeping all the brands will further help to allay some of the fears on jobs. Though there will need to be some rationalisation on duplication in HQ, 400 jobs are expected to be created in service centres in Belfast and Sheffield, and there are no planned redundancies in retail.

On the topic of jobs, you’ve probably seen that LinkedIn has been buzzing  with news on who has got the roles in HQ. I’m especially pleased to see the female representation as the new leadership team forms, and I congratulate everyone who has secured appointments. The industry will benefit from diverse leadership in all its forms and I hope we can see more progressive inclusion in the sector as a whole.

What material difference will all this make to you as a consumer?

This time next week the first benefits will start to come through as Three and Smarty customers receive a 20% average 4G speed boost.

And by Christmas, 27 million Vodafone and Three customers will benefit from the ability to freely access the two networks.

As for the brand, we should expect to see more emphasis on broadband as it becomes the (and I paraphrase their release) ‘UK’s largest full fibre provider’. I’m sure we’ll learn more about how it will compete in this busy space over the summer.

It’s something to keep an eye on as competitor brands start to make their moves. Consumers will want to get full value from their full fibre and but won’t want to pay over the odds. There could be some enticing offers coming into ad-land soon. 

Business propositions will all come under the Vodafone brand, which is pretty much what we predicted as it leverages Vodafone’s strength in this area.

I think it’s a real shame for the Three Business team, which has made strong progress into the segment, hitting a slice of the market that wanted something less corporate and more flexible. They’ve brought some interesting propositions to market and been a significant challenger on pricing. 

It therefore goes without saying that I’m excited to see some of the business team move into the wholesale team where they will be able to apply their experience and expertise to the dynamics of the ever-changing MVNO market. 

As ever, time and money is what’s needed to make all of this happen. As a consumer, I’d stay on top of the deals as there will be some good ones for anyone in the market ready to change contracts. 

MVNOs have a lot to gain in this space and could be aggressive on two fronts. Firstly they could disrupt with some great headline offers. Nothing new there but they could up the ante with advertising. 

And secondly, they could take advantage of the growing appetite for eSIM. One way to pitch it is to encourage people to have a ‘back up plan’ whilst the network integration happens. 

By using phone settings to choose the best bearer, consumers won’t feel any downsides to interruptions to service. (It’s what I do now, naturally with an MVNO SIM and it allows me to access Vodafone, Three and BT for data services). 

Main takeaway is that this isn’t a time to fall asleep on watch. There will be some great skills coming into the market from HQ, there will be some opportunities to swoop in while the HQ is distracted with network priorities and there’s wiggle room to negotiate on wholesale deals. 

As ever, it’s all to play for!  

Need help deciphering what all this means for your business? Then get in touch. Our team of proposition, segmentation and GTM specialists are ready to help you compete.

The post VodafoneThree announces £11bn investment. What can you expect? appeared first on Graystone Strategy.

Given the slow start in the consumer sector, it would be easy to think there is no opportunity for MVNOs at the moment. However, armed with an understanding of the possibilities there are in fact plenty and with the right strategy there’s a chance to steal a march on competitors, including the operators.

What’s the hype then and why should MVNOs care? Above all, 5G unlocks new use cases and revenues. There are four main areas that MVNOs could capitalise on:

1.‘Cut the cord’ superfast broadband. Perfect for the new working from home scenarios we face for the short to mid-term. For renters this really could be a game changer too. No need to fuss over contracts or being offline while you wait to be connected by your ISP each time you move.

2.Entertainment. Gaming has rocketed in the last six months and according to NewZoo it will become a $153bn business this year. 5G will undoubtedly contribute to this growth helping to deliver faster, slicker gaming experiences. As a replacement to broadband you’ll also get faster downloads and be able to ditch streaming with every latest binge series instantly available on demand.

Looking to the success of 5G in South Korea, VR and AR will be the applications to tap into. Given retail challenges at the moment, we’ll see trying on clothing before you buy or being able to see if a big ticket item like a sofa will fit in your house as the sorts of applications that emerge first.

3.Massive connected IoT for business and consumer. There are some sectors very actively pursuing this strategy. Energy, utilities and the vision for smart cities being among the most advanced. The ability to pin-point a water leak with sensors on a pipe will take out all of the inefficiency and cost of sending a team out to dig up a road and work for hours in all weathers to fix it. Instead those teams can get to work quickly at the exact location and solve more problems in less time. That has to be good news for our consumption of resources, and the consumer’s pocket.

4.Private networks and network slicing. This is perhaps one of the most interesting use cases. And it’s where MVNOs can get in on the act offering universities, major transport hubs and alike their own secure, uninterrupted private network.

So far so good. Lots of potential. But only if you can create the right conditions.

Buyer Beware

There are some watch-outs for MVNOs when they plan their strategy. What if

• your host network won’t share 5G? That’s an immediate blocker for MVNOs who want to gain share.
• your host network allows you access but maintains the same old per GB wholesale model? You will be bankrupted in a week!
• your customers just can’t afford 5G handsets – early handset launches will be premium, or the IoT customers you supply might not be able to justify a tech refresh.
• your tech, the core network and beyond can’t be easily upgraded?

The solution, as always, is to look to the customer. They are less worried about the technology and more interested in the benefits it delivers. So there are some things to consider before you write off any chance of 5G being a part of your future.

Firstly, if your host is not keen to share, then think through how you can change the conversation you have. There are definitely ways to successfully engage operators and demonstrate the incremental value you will bring. (Our blog has lots more information on this here, and we can help with specific concerns you need to broach.)

Changing the approach and arriving at a mutual agreement on the positives will make the commercial conversation much easier. And let’s not forget the economics of 5G means operators will have a declining cost per GB anyway, so tackling the elephant in the room early can be worthwhile.

But what if your target audience struggles to afford a handset or make the business case work? Get back to basics. Why do your customers like you? What is it you offer that others don’t? Trade on that and develop packages that will address their concerns and the rest will follow.

You may need to face some home truths too. If for example, the tech upgrades on your platform don’t stack up then it’s likely you don’t have a compelling 5G business case. But that’s not insurmountable, with some expert help you may find a way to overcome this or arrive at a decision that you need to focus on different technology to boost your presence in complementary areas, or something entirely different.

And that’s really the key with 5G – assessing the opportunities and establishing how it fits with your brand, your assets and investment. In doing this, it’s important to remember that 5G is just an enabler. People really won’t care how the tech works as such. It’s the products and services that 5G delivers that will get them excited. So, with that in mind, make sure you look at all the options. Read widely about the examples overseas and the tech in beta trials. You could turn up some options you would never have considered. And in my experience, it’s sometimes the unexpected can deliver a whole new world of possibility.

But equally don’t be afraid to accept that the headline hype might not be the avenue to go down, it might be the behind the scenes applications that are the best fit, or none at all. You might decide that 5G isn’t for you and you can capitalise on the niche markets that others won’t attempt because they will focus on 5G.

Above all focus on the purpose of your brand and the elements that make it attractive to customers. 5G or no, it’s a strategy that any MVNO should adopt.

If you need help to assess the market opportunity, size, take the right decisions and engage an operator then we can help….

The post 5G – is it a benefit or a curse for MVNOs appeared first on Graystone Strategy.

Consumer customer growth will slow further

We’ve seen Covid-19 effect major launches so 5G handset supply was always going to be tricky this year, but this is quite a spanner in the works for any operator with desires to grow their 5G base in 2020.

It’s not helped by the fact that 5G is quite a niche proposition for consumers and that’s even for the really early adopters. We’re talking about the ‘Tech trailblazers’ (30% of the market) wanting 5G to begin with. That said, it’s not an insignificant number so the operators will have planned to attract them early to help showcase the possibilities, and get the revenue in the door. Their initial growth strategy will be pinned on business applications (see final point below) and these Trailblazers. But like 3G and 4G, 5G will go mainstream as more handsets become available and, in particular, once Apple is able to supply a decent quantity of 5G iPhones.

Network complications

Handsets is one thing, using it on a working network is another. This week’s decision will undoubtedly impact the speed of the rollout of 5G coverage. Networks have built plans around the availability and supply of Huawei kit, and now need to see if the more likely suppliers of Ericsson and Nokia through to re-emerging brands like Fujitsu, NEC and Samsung can help fill the gap.

Will they be able to make up the deficit quickly enough? My guess is it will be a perfect collision of not enough kit from any of them quickly enough, and delays on taking out the existing kit. That all adds up to a slower than planned growth of 5G coverage, and, as networks will ultimately need to extract the kit they have already installed, there will be disruption to existing 5G service.

Overall it’s going to be an interesting race between operators to change quickly and with limited impact to customer experience. And it’s a race it will be difficult to judge as networks seldom publish their plans in any great detail, so we won’t really know how they are progressing against the initial plan they had.

Will Customers pay the new 5G bill ?

The cost implications of replacing kit are most likely to be felt by consumers. The availability (or lack of) alternative base station kit may drive up market prices and therefore costs to deploy networks. Plus reversing out already purchased Huawei kit has a double whammy effect, the original investment is wasted and you are effectively installing, de-installing and re-installing which all has associated costs. That has to be financed somehow and while I don’t expect data pricing to go up I do expect data pricing to stabilise and the steady decline we’ve seen over the last couple of years slow down.

It’s very likely this will cause some networks to re-evaluate their 5G pricing strategy. Consumers should therefore expect 5G to be at a premium in terms of handset costs and possible the available tariffs for 5G.

But as ever, it always pays to shop around. MVNOs like Sky Mobile (on the O2 network) already have access to 5G and with recent developments in the MVNO and MNO market, and the announced merger between O2 and Virgin we may see some good deals in the short term.

What do consumers think and what will they do?

The news has made every front page and it’s likely consumers will now be concerned about buying Huawei branded devices as a result. They are likely to think more about the trade-offs than they usually would when investing in a new phone.

Huawei is likely to extend its range of very cost effective 5G devices competing against the more expensive Samsung or Apple (once available). It remains to seen whether price over perceived security wins out.

My hunch is customers will take longer to adopt 5G anyway, simply because we have a shrinking economy and people will be keeping an eye on their discretionary expenditure.

MVNOs left in the cold?

All the complexity in the practicalities of delivering 5G and the added pressure on economics might have mid-term consequences for MVNOs. The big question is will operators offer market parity to their partners? A delay in parity would help ensure 5G is synonymous with the big networks. Yet, MVNOs exist for the very reason that there are sets of customers operators will never reach. Extending 5G to MVNOs early (as some Operators have already done) could boost market traction.

It would not be a huge surprise if Operators take this opportunity to review the 5G MVNO strategy and whether they can delay MVNO access. Their cost base has changed significantly so the question is, do they drive for volume and include MVNOs or pursue a premium strategy for their direct customers only?

I imagine wholesale and finance teams are working intensely on business case calculations now.

Private networks may stall

Finally, we can’t look at the ramifications without talking about the impact on enterprise. This is where the real 5G business case lies, helping companies become more efficient and innovate. Any delay to 5G means a delay to some aspects of digital transformation, which is a strategic imperative at the moment.

The development of private networks, which is probably one of the most interesting use cases, will also take a hit. Private networks are not covered by the legislation but as Huawei has targeted this market and built some innovative RAN solutions I can see another potential problem.

All businesses are very concerned about security and data protection in line with legislation, and as a matter of reputational necessity, so I imagine any business in need of a private network, will be intently reviewing the perceived risk, seeking alternative suppliers and again increasing demand on more expensive alternatives to Huawei. The question is will that blow the business case?

As you can see there’s a lot at stake and as the points above show the strategic choices operators face are complex. From performing technical change through which propositions to define and price first, to whether to launch with MVNOs.

Few will have predicted the scenario five years ago, but real it is and it won’t be reversed. Navigating the short-term upheaval for long-term gain is now the name of the game.

If you need help working through your strategy in response to these changes then get in touch.

The post Six consequences of the Huawei ruling appeared first on Graystone Strategy.

Recent months have been about survival of the fittest. And while change is an accepted part of doing business, plans really have been turned upside down as the economy tanked, uncertainty dug in, and an ever changing set of rules came from the government.

This kind of change means that today’s issues, (which could quite literally have become very different to yesterday’s and are likely to be different again to tomorrow’s), become the talking point at the boardroom table. The long-term plan gets shoved aside.

It’s a really common behaviour at the moment. The ‘Covid effect’ boils down to obsessing on the here and now and not adjusting at the detriment of the long term strategic plans. Decisions are deferred, expenditure is questioned, cuts are made.

But as history can tell us, fortune favours the brave.

So, it’s no surprise then that despite the question mark over 5G’s relevance, Vodafone is still forecasting a big upside to 5G. True enough the cynical can say Vodafone has a vested interest in making 5G happen, but its whole approach to the pandemic has been one of accepting its role as a critical service provider and stepping up. It’s seen and helped demonstrate the bigger picture and provided the technology solutions and support to boot.

The alternative approach, which we’ve also seen in the industry, is to entrench. Reduce marketing expenditure. Furlough staff. Reduce service levels.

Setting aside the retail hardships, in an industry like telecoms such an approach can only lead to more misery – ultimately you lose momentum and catching up becomes much more challenging.

It’s a two-fold approach that’s needed: 1. Now, 2: next year. There’s an immediate need to look at the services 5G can help companies innovate and deliver tomorrow and react to what customers want now. As Peter Scott illustrates in this piece in The Daily Telegraph, understanding your service model and how people want to shop and buy a product can differentiate a brand.

If you can put someone in touch with an expert in a store by video you are helping them make better use of their time and feel secure about the choices they make and the brands they gravitate to. Your assistants are less exposed to risk and can do what they do best: explain and demonstrate the latest washing machine or smart speaker and close a sale.

But for me it’s not just about the technology, it’s about the attitude towards longer term planning. Now is the time for boards in retail, travel and utilities in particular to review their five year plan, use the intel they have gathered over the last few months, think about their customer segments again and, if necessary, alter course, make new investments and keep moving forward towards the vision.

We are still very much in the throes of a marathon when it comes to managing the pandemic. I’d therefore argue that 5G and the assorted technologies it supports, like AI, AR and VR, and M2M IoT, can help long-term recovery in so many ways. It shouldn’t be dismissed.

There’s much to gain from investing in this vision – more accurate billing, more varied and personalised entertainment and subscription services, smarter city living and travel options. The operators are starting to bring to life the possibilities and show how investment can deliver ROI quickly. Investing in collaborative trials and pilots is a definite option for the execs who are brave.

Yes, there are definite use cases to deliver today – there’s the urgent use case for temperature monitoring at tickets turnstiles and access gates for instance. But there’s also the longer-term vision for using 5G to enable IoT that can help with things that have hit the public’s conscience since lockdown, such as managing food security and supply chains, to greener living and everything in between. It’s a perfect PR opportunity to strike now.

To sum up, I would see it as an opportunity that only 5% of companies think 5G is more important and relevant in a CV-19 world. Those 5% are the brands that can see its potential and are the ones to watch. They are already rethinking their strategy and making the link between innovation and recovery. And I believe that it’s those companies that will become even more relevant to people and help them live better connected lives. And what’s more they will be the businesses that swerve becoming another casualty in the long-run.

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