No longer are we fixated on the opportunities for B2C that migrant markets, supermarkets and multi-play bring – though they do of course still bring a multitude of opportunities – instead attention is moving at speed to B2B and in particular IoT.

Gartner predict some 25 billion IoT device end points by the end of 2021It was already driven by everything from smart cities to our need to solve major agricultural problems like feeding the world’s population more efficiently, but Covid-19 has accelerated thinking and the necessity to implement solutions.

Those extraordinary predictions from Gartner are entirely possible when you look at the amount of investment going in and the urgency provoked by the pandemic. You just need to look at Vodafone’s repeated ambition to expand its narrowband IoT footprint in Europe to see how committed the big boys are.

With investment comes opportunity for growth and innovation. Small IoT specialists are springing up everywhere and fuelling the new ecosystem.

This all plays into the hands of MVNOs as nothing is possible without connectivity. And as mobile is at the forefront of this emerging world, so MVNOs can take full advantage in verticals that need mobile connectivity.

How so? Well, it’s due to the resilience and flexibility of the MVNO model.

Fact 1, MVNOs heritage of problem solving means that they can now deliver more rapidly: Typically MVNOs have had to work around network connectivity complexity. They’ve done this by developing in house systems for connecting services and SIMs. It’s made them faster and more flexible than the MNOs and it’s given them an added capability they can trade on.

This is especially true for full MVNOs, which have benefited from the flexibility that owning the HLR/HSS, IMSI and number ranges provides – by using multi IMSI solutions MVNOs can build a large geographical footprint and provide a seamless transition across borders. Throw in the emerging E-SIM capability and you have some exciting opportunities.

Cubic Telecom is a great example of this approach to sweating the assets. Originally a consumer roaming proposition it pivoted into IoT and connected vehicles, and with coverage in over 180 countries it’s easy to see why Volkswagon Audi Group made investments in Cubic – how else would 50,000 new connected vehicles roll off production each month? Last year Cubic made a bold 5G statement, securing a further $26.4m funding as part of its strategy to get ready for the technology.

Fact 2, the mindset is in IoT gear: The MVNO mindset is more entrepreneurial than the big networks’. An MVNO isn’t preoccupied with plastering its consumer brand all over the customer offer, nor do they entertain complex governance or have intragroup stakeholders to appease. This makes them inherently agile and quick to respond to the market. It puts them in a position whereby they can roll out a full service before you can say internet of things.

Interestingly, there’s a future case to say MVNOs don’t need to be virtual. They could get a slice of a 5G network and run it themselves, slicing it further to create private networks for major campus style operations like airports, or universities.

Fact 3, Enterprises like MVNOs: The companies buying IoT services like challengers. I’ve seen it with my own eyes. They get the model, they get the agility, and they want the benefits it brings like yesterday.

From their perspective a challenger MVNO brand is a perfect partner so long as they have a quality network behind them. Buyers are happy to trade speed to market and first mover advantage against partnering directly with a mobile network. And they get this because the challengers have more agile software development – the MNOs are improving but they still have a long way to go in terms of agile mindset and delivery. In the next 12 months we will see this outlook manifest further as robots are put to work on manufacturing production lines.

That’s why I think for Ofcom’s predictions of 160million IoT connections in the UK by 2024 are to play out it’s going to take MNVO / enterprise partnerships to make it happen.

And it’s why you can expect to hear everyone from platform vendors, analytics and data companies to MNVEs, Os and Xs talking it up at MVNO World Congress. It’s why I will be joining.

The post IoT and MVNOs – Three reasons why it’s fair game 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.

The post 5G is less important now. What’s going wrong? appeared first on Graystone Strategy.

But joking aside, the agenda is an indicator as to how much the MVNO market has matured and how bright its future is. It all underlines how exciting the industry is and if I’m honest why I love it so much. The themes associated to these topics, especially those related to new technologies, reflect changing times.

No longer are we fixated on the opportunities for B2C that migrant markets, supermarkets and multi-play bring – though they do of course still bring a multitude of opportunities – instead attention is moving at speed to B2Band in particular IoT.

Gartner predicts some 8.4 billion IoT devices will be in existence come 2020. It’s driven by everything from smart cities to our need to solve major agricultural problems like feeding the world’s population more efficiently.

Those extraordinary predictions from Gartner are entirely possible when you look at the amount of investment going in. You just need to look at Vodafone’s ambition to double its narrowband IoT footprint in Europe by 2019 to see how committed the big boys are.

With investment comes opportunity for growth and innovation. Small IoT specialists are springing up everywhere and fuelling the new ecosystem.

This all plays into the hands of MVNOs as nothing is possible without connectivity. And as mobile is at the forefront of this emerging world, so MVNOs can take full advantage in verticals that need mobile connectivity.

How so? Well, it’s due to the resilience and flexibility of the MVNO model.

Fact 1, MVNOs heritage of problem solving means that they can now deliver more rapidly:Typically MVNOs have had to work around network connectivity complexity. They’ve done this by developing in house systems for connecting services and SIMs. It’s made them faster and more flexible than the MNOs and it’s given them an added capability they can trade on.

This is especially true for full MVNOs, which have benefited from the flexibility that owning the HLR/HSS, IMSI and number ranges provides – by using multi IMSI solutions MVNOs can build a large geographical footprint and provide a seamless transition across borders.

Cubic Telecom is a great example of this approach to sweating the assets. Originally a consumer roaming proposition it now has over 200 3G roaming and 60 LTE (4G) agreements in place. This is one of the reasons why Volkswagon Audi Group has made investments in Cubic. How else would 50,000 new connected vehicles roll off production each month?

Fact 2, the mindset is in IoT gear:The MVNO mindset is more entrepreneurial than the big networks’. An MVNO isn’t preoccupied with plastering its consumer brand all over the customer offer, nor do they entertain complex governance or have intragroup stakeholders to appease. This makes them inherently agile and quick to respond to the market. It puts them in a position whereby they can roll out a full service before you can say internet of things.

Fact 3, Enterprises like MVNOs:The companies buying IoT services like challengers. I’ve seen it with my own eyes. They get the model, they get the agility, and they want the benefits it brings like yesterday.

From their perspective a challenger MVNO brand is a perfect partner so long as they have a quality network behind them. Buyers are happy to trade speed to market and first mover advantage against partnering with a mobile network. And they get this because the challengers have more agile software development – the MNOs are improving but they still have a long way to go in terms of agile mindset and delivery.

That’s why I think if Ofcom’s predictions of 160million IoT connections in the UK by 2024 are to play out then it’s going to take MNVO / enterprise partnerships to make it happen.

And it’s why you can expect to hear everyone from platform vendors, analytics and data companies to MNVEs, Os and Xs talking it up at MVNO Europe. I know it’s why I will be there, never mind the chance of a full house in Buzz word bingo…

The post Three facts that make MVNOs right for IoT – a look ahead to MVNO Europe (and a game of Buzz word Bingo) appeared first on Graystone Strategy.