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. 

The post Technology parity is a must for MVNOs today, here’s why. appeared first on Graystone Strategy.

The global MVNO market is currently worth around $95 billion and by 2035 it’s expected to grow to well over $190 billion. Staggering as these numbers are, I don’t believe they are hype.  

Growth is coming from across the world in both emerging and mature markets. 

In Latin America, Africa, Southeast Asia digital-first propositions enabled by ‘MVNO-in-a-box’ and SaaS solutions are creating opportunities for new entrants in emerging markets. 

Growth in the mature markets of Europe and North America is coming from enterprise IoT, targeted consumer propositions, and the fascinating trend of using mobile not just as a revenue stream, but as a critical part of the strategy to deepen loyalty with existing customers.

Just last month, Lidl and 1GLOBAL announced a partnership that will see the supermarket chain become an MVNO in up to 30 markets, embedding eSIM plans directly into its Lidl Plus loyalty app, which already has over 100 million users.

Then there’s Bait, Walmart’s MVNO in Mexico, proving the power of a focused strategy. It ended 2025 with 26.4 million active users, up 44% in a single year, adding 8.1 million subscribers, net.  

Bait has achieved this incredible growth by deeply integrating mobile into the Walmart retail experience. It’s a simple and effective proposition giving people free data with in-store purchases, supported by activation across 3,000 outlets. 

The results speak for themselves. Bait customers spend two and a half times more in Walmex stores than a non-customer. That statistic alone tells you everything about why retail and mobile are such powerful allies and how mobile has become a critical element to numerous brands’ growth strategies.

Neo-bank MVNOs are also gaining serious momentum. Revolut, Lendable, N26, Monzo, to name a few, are weaving mobile into their financial services ecosystems. 

And in the community space we have seen everyone from influencers to US presidents, sports clubs to religious groups embrace the MVNO model.

But the conference is not just a celebration of growth. It is a place where we interrogate the hard questions too, and this year there will be three critical themes. 

THEME ONE: THE SATELLITE QUESTION – OPPORTUNITY, RISK, OR INDUSTRY EARTHQUAKE?

Let me start with the one I think carries the biggest long-term strategic implications: Satellite.

In March, at Mobile World Congress in Barcelona, SpaceX took to the stage to unveil Starlink Mobile, its direct-to-device service. This followed T-Mobile’s launch of T-Satellite, in partnership with SpaceX, in 20025 with plans for next generation ‘V2 satellites’, targeting 5G-class speeds from orbit, in 2027.

Amazon is also getting in on the action with Amazon Leo, a low-Earth orbit broadband constellation targeting over 3,200 satellites. It’s currently working on partnerships to monetise this new asset. I don’t think Amazon will dabble in this market. It will dive in hard with every intention of disrupting the market by building a global network, just as they’ve done in retail, cloud computing, entertainment and logistics. 

So, at conference we’ll ask at what point does satellite connectivity starts to replace the mobile infrastructure of today. 

We have already seen WIFI take share of customers use in the home. Will we see satellite connectivity also taking traffic away from traditional networks, and if so, will they do it in partnership with operators or in competition with them?

This won’t happen today but it’s a question we need to be ready to answer. Experts agree that physics and economics make satellite a complementary technology to terrestrial networks at present, but V2 satellites promise one hundred times more data density than V1 and that is a whole new ball game. 

If satellite becomes an alternative provider, then the asset that operators have spent decades and tens of billions building and that MVNOs rely on could become redundant, or at least less crucial in some areas.

This brings risk and opportunity. On the risk side, Starlink’s current T-Mobile partnership explicitly excludes MVNO access, and we may well see this approach adopted more broadly.

If satellite capabilities are locked within operator brands, then MVNOs could find themselves excluded from a major new technology wave, exactly the scenario we at Graystone Strategy advise clients to contract against. 

Parity of access clauses in your wholesale agreement are not a nice-to-have; in a world of rapidly evolving technologies, they are protection against a very real threat.

On the opportunity side, this trend has the potential to significantly re-write how consumers access mobile telecoms. We could even see a world where every telecoms brand is an MVNO accessing connectivity from national radio network and satellite combined.

That type of shift needs innovative thinkers that can rip up the rule book and start again. That type of thinking is present at MVNOs World. As a community we are world champions at challenging the status quo and doing things differently.

THEME TWO: CONSOLIDATION – THE DOUBLE-EDGED SWORD

Europe’s mobile network operators have been pushing hard for permission to consolidate. They are being successful and generally, that’s bad for MVNOs as fewer operators means fewer potential wholesale partners. And less competition in wholesale almost always means higher prices and less favourable terms. 

But – and this is the critical counter-narrative – consolidation historically comes with regulatory remedies which are an important catalyst for MVNO growth. We have seen a range of remedy models deployed in the UK, Ireland, Austria and even the Channel Islands, all seeking to drive consumer competition through MVNOs.

We’ve also seen a more radical solution deployed in Mexico. The Red Compartida (Altan Redes) was effectively born from the need to inject wholesale competition into a market dominated by Telcel. Today, 83 MVNOs use that network, and it’s worth noting Bait built its entire 26-million subscriber empire on it. 

We’ll discuss in detail how MVNOs can manage these changing dynamics and refine strategy to ensure opportunity is maximised and the risks are minimised. 

THEME THREE: CHANGING CONSUMER HABITS – THE MARGIN SQUEEZE AND THE PROPOSITION OPPORTUNITY

The third theme is about how consumers are using their phones, from the changing use cases, technologies and attitudes to mobile, to the economics of mobile data.

Let me start with the economics. Data usage is going up. In 2025, 93% of operators globally saw growth in data usage per subscription. 

But here is the problem, ARPU is not keeping pace. Across all markets, we are seeing a growing gap between the cost of serving that data and the revenue earned from doing so. 

The result is a margin squeeze that is hitting MVNOs particularly hard, because MVNOs have the added layer of a wholesale cost they cannot fully control.

There are broadly two responses to the margin squeeze. The first is using tech to reduce operational costs. AI has a huge role to play here supporting a less costs more margin approach. 

The second, and in my view the more interesting, is the race to build propositions that escape the commodity trap entirely and grow value.

Which brings me to the second dimension of changing consumer habits, the social and cultural shift that is creating entirely new proposition opportunities for this industry.

Across the world, parents, governments and regulators are waking up to the impact of uncontrolled social media access by children. Australia has legislated a ban on social media for under-16s, and many more countries are putting this issue under the microscope.

This is not just a policy trend. It is a consumer behaviour shift. More parents are actively looking for technology solutions that keep their children connected AND protected.

They want their kids to have a phone, but not a portal to unregulated content. They want to give independence while maintaining visibility, and they are willing to pay a premium for that reassurance.

Spacetalk, an Australian MVNO and technology company, has created a proposition purpose-built for families offering child tracking, check ins and full parental content controls. 

This allows kids freedom, but within parental guardrails, making parenting in this digital age just a little less stressful. Spacetalk is pursuing white label deals on its technology, already securing one with Vodafone Australia. For pioneering MVNOs, there’s a huge opportunity to seize on this openness to partnership. Done well it has the potential to overcome the ARPU squeeze. 

The trick MVNOs need to take from this is not to compete on price for the same generic data plan but identify a segment with a specific pain point and build a proposition so differentiated that price becomes secondary to value. 

It’s also a reminder that cost cutting isn’t always the way to go and building customer relationships is. 

So, there you have it three themes for congress, and as we’ll no doubt discuss, endless possibilities for success. 

If you would like to discuss how you adapt your MVNO’s strategy to address one or more of these themes then drop us a line, we’re happy to meet for a coffee during the conference, or a video call afterwards. 

The post Satellite, consolidation and ARPU – the hot topics at this year’s MVNOs World appeared first on Graystone Strategy.

If you’re at the Congress and fancy a coffee or a beer, drop us a line.

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For telcos, the value is bigger than an app.

Spacetalk creates daily branded engagement, turns one subscriber relationship into a household relationship, and gives operators new ways to understand, retain and grow family customers.

That means richer household insight, more relevant next-best-actions, lower-cost acquisition opportunities, and new revenue paths across mobile plans, broadband, devices, smartwatch connectivity and premium app subscriptions.

Spacetalk’s MOU with TPG Telecom is progressing to contract for deployment of the platform to Vodafone Australia’s 2.8 million post-paid customers — an important signal that family safety can move from consumer feature to operator growth engine.

The UK timing is strong. The Online Safety Act is in force, the under-16s social media debate is intensifying, and parents are looking for practical tools that help them protect their children without simply removing the benefits of mobile technology.

If you lead consumer, digital, CVM, marketing or commercial at a UK MNO or MVNO, and the family segment is on your agenda, drop me a line.

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Revenue is vanity, margin is sanity.It’s an old adage, but one that holds true for the MVNO Market.

When we speak to MVNOs, they can often think the garden looks rosy. They are growing customer numbers, share and the total revenue metrics are good. But look a little closer and it soon becomes apparent that margins are under acute pressure. Just about every established MVNO I talk to are trying to overcome the squeeze and it’s moving higher up the priority list.

The post Margin Under Pressure: How Mature MVNOs Stay Profitable and Keep Growing appeared first on Graystone Strategy.

VNOs WorldHere’s a stat to make you sit up and think: Prescient Strategic Insight’s latest research indicated that the MVNO market will reach a staggering $155 billion valuation, up from roughly $92 billion valuation today.

The post From idea to MVNO: A practical launchpad for new entrants appeared first on Graystone Strategy.

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.

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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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