The Nigerian Communications Commission (NCC), Nigeria’s telecoms regulator, has now issued over 30 MVNO licences. There are five varying tiers that MVNOs could apply for, each one a reflection of the service it will provide, and the technology set up. In the main, most of the licensees have opted to have control over their assets. (This blog summarises the background, has more detail on the tiers and who has won licences)
Now the hard work starts. How will the MVNOs launch and win a slice of the 195m mobile subscriptions Nigeria boasts?
Experience shows that there are five specific areas of the go to market plan that need attention immediately to ensure a smooth and successful launch:
- Start with the customer. All too often I see MVNOs approach their launch as a technology project. I agree it’s exciting to buy new platforms and technology and work on the complex challenges of stringing it all together. But it is an entirely worthless exercise if you have no clarity on who your target customer is, what they want and how you plan to build a differentiated proposition for them. Without this clarity you could end up buying technology you just don’t need or make the expensive mistake of investing only to discover that further investments are required to deliver the customer proposition you decide to launch. Think about the different segments you may want to target and how you can offer a truly differentiated proposition to that segment. That might be in the value you offer, the distribution (e-SIM offers a great opportunity to reduce joining costs), or how you treat customers. Nigeria offers a wealth of different communities and enterprises to target and I wouldn’t be surprised if at least some of the licensees are considering targeting business customers, or even stepping into IoT and Private networks to support some of the large industries in Nigeria.
- Build a great relationship with your host MNO. As part of the licencing process, MVNOs had to engage with one of the network operators in Nigeria and secure a Memorandum of Understanding (MOU). But that’s only the start of the relationship and, now you have your licence, it’s worth ensuring the partner is still the best fit. It’s not unheard of to renegotiate, switch, or go for a multi-network deal particularly in a geography as vast as Nigeria. Choosing the right host is critical for success for so many reasons whether it is coverage in the geographies you wish to target, getting the right commercial offer that rewards you as you scale, or simply ensuring that the partner is bought into your success. But the biggest reason is overhead, as depending on the tier you have selected, the wholesale costs could be as much as 65-70% of your gross traffic margin. You’ll need solid negotiating skills and a compelling story to back up why you should get better rates, access to technologies and so on. As you progress your launch, the network operator will want to understand more about your target customers and go to market plans before contracts are signed. Don’t forget that you are technically a competitor, so your launch plans need to be communicated carefully. Only speak with the wholesale team and ensure that your host operator is using clear information barriers between wholesale and retail. Operators should be thinking about how they will support the new licensees. It’s new territory for them and meeting the needs of the MVNOs, and doing so at scale, is something they will want to get right. In my experience, the best host operators build a distinct wholesale team or business unit and treat the relationship as a partnership that delivers incremental growth to both brands. If you feel like you’re being treated like a supplier or a less important customer, then your mobile network operator has some work to do. The alternative is that operators partner with a Tier 4 licensee and then get them to manage the multiple other MVNO via aggregation or enablement services. It’s a light touch approach for the operator but adds ‘mouths to feed’ in the value chain.
- Learn from other markets. Although each market has its own unique challenges, there is also a great opportunity to review and understand what has been successful elsewhere. There’s plenty to draw on. I’d strongly advise getting to one of the established global MVNO events, either the Informa MVNOs World Congress or MVNO Nation, where you can hear for yourself the ways MVNOs have outplayed the market. They are also great places to meet, network and learn from a small and friendly MVNO ecosystem community. Fundamentally, look for propositions that have worked elsewhere and adapt and amend them to suit your local customer needs. Whatever you do, do not be tempted to just copy existing propositions in your market, even if you can do it more cheaply. It’s simply not a sustainable business model, and it assumes that the existing MNOs are always getting it right for customers. When I was chair of the 2023 MVNOs World Congress, there were plenty of examples where MNOs are missing tricks that MVNOs are exploiting. The most frequently cited challenge is that offers and tariffs must be dictated by inflexible, legacy technology stacks. As a new MVNO you can take a more digital and cloud-based approach, which will enable faster delivery, more flexibility and ultimately a better customer experience.
- Fit your technology around the proposition. This brings us to the next priority – technology choices. Assuming you have worked out the proposition you need, and your commercial offer gives you clarity on what your host operator will provide (putting you in a position to deliver your proposition make a margin), then you can go shopping! One of the consistent themes at the MVNOs World Congress was how MVNOs have been able to accelerate growth through the agility of the digital systems provided by their vendors. It’s a broad category too covering everything from OSS / BSS suppliers, core networks, through payment solutions, apps, web channels, to e-SIM, and CRM. The key point on vendor selection is to manage a process that lets you select and buy systems that are flexible and scalable and offer the capabilities your customers need. Think about the use cases for the tech and whether the vendor can support them, with a proven roadmap for growth and future differentiation. For instance, if you are planning to build a B2B proposition, look for vendors with proven skills serving that market – it’s very different to meeting the needs of consumers. If it’s IoT then the needs will be different again – security and management systems are likely to be a high priority.
- Resources – The hard truth is that none of this will be possible without money and people. MVNOs typically run very lean even though the tasks that need to be done are the same as those of an MNO (apart from running the network). Think very carefully about your target operating model and what resources you will need when, and whether they need to be permanent resource or contracted as required. When we work with clients on their go to market plans, we always build a resources plan that reflects how the roles and individuals change as the MVNO grows. It starts with a team for start-up, which grows for scale up and finally arrives at steady state. It’s always worth thinking about the experience you need too. A competent marketer from any market will have transferable skills but when developing products and propositions you will need someone who understands the nuances of mobile. Don’t be afraid (or too proud) to ask for professional help. The amount of MVNO go to market experience in Nigeria is going to be relatively scarce and in high demand. Look further afield if you need to. Specialist consultancies like Graystone Strategy can help, either supporting the delivery or acting as board advisors, mentoring, and coaching your local leadership team and allowing you to leverage experience of multiple MVNO launches globally.
We’ve highlighted just a few of the many blogs we have on graystonestrategy.com that share our experience and expertise of launching, running and growing an MVNO, but you’ll find all of our content here.
If you really want to accelerate your learning then it’s definitely worth considering our ‘Everything you need to know about launching an MVNO’ interactive workshops
Or get in touch to talk specifically about how we can help you. You can reach us through our contact us page or drop me a WhatsApp on +447766244962.
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- The five MUST DO actions Nigeria’s new MVNO licensees should take for a successful launch - July 3, 2023
- Nigeria’s newest mobile licensees have a big opportunity to change the telecoms market - July 3, 2023