Transcript Document

MVNO – One Name, Many Flavors
2005 Wireless &
Mobile WorldExpo
May 2005
www.businessedge.com
© 2005 BusinessEdge Solutions Inc. All rights reserved.
What is an MVNO
> Mobile Virtual Network Operator
• Purchases wholesale network voice and data access from a Host
Network Operator (HNO) and sells own branded wireless service
to customers
• Product design and creation (within HNO operational parameters)
• Defines the addressable market, develops campaigns,
advertising, promotions, acquisition, loyalty and retention
• Owns the sales and distribution strategy and operation
• Owns the customer relationship
• Network element ownership and control varies from none to
extensive – depending on the MVNO model
© 2005 BusinessEdge Solutions Inc. All rights reserved.
04.12.05 | Confidential | 2
Agenda
> Wireless Industry
> Becoming an MVNO
> The MVNO Eco-system
• MVNO
• MVNE
• HNO
• MVNC&SI
> Summary
© 2005 BusinessEdge Solutions Inc. All rights reserved.
04.12.05 | Confidential | 3
Communications Industry Landscape
> Communications convergence is happening. It is being driven by the desire
of all companies to own the customer, grow revenue, and increase customer
satisfaction
> Boundaries between services provided by traditional cable, wireline and
wireless providers are rapidly being eroded
> BUT in parallel we are seeing the traditional value chain disaggregating
Voice
Technology Push
•
•
•
•
Broadband
IP
Content
Mobility
Video
Applications
Content
Services
Delivery
Transport
Wireless
© 2005 BusinessEdge Solutions Inc. All rights reserved.
Business Pull
•
•
•
•
•
Customer Demand
Lower entry barriers
Dis-aggregation
Shareholders
Insurgents
Data
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The Wireless Service Provider Challenge
> Market Maturity
Semi-Annual US Wireless
Industry Subscriber Growth
• Many Operators – little
differentiation
• Post Paid market growth is
declining
• MOU up, RPM down
• Price sensitivity and competition
are high
• Cost Per Gross Add increasing
• Profitability is key as investors
look for returns
• Investment in the core network
remains high
Source: Merrill Lynch, US Wireless Report 2003
> Service Provider Response
• Increased Customer Choice
• Convergence of technologies
• Technology
• Restructuring
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04.12.05 | Confidential | 5
Wireless – Industry Restructuring
Fixednetwork
operators
> MVNOs
Media
companies
• Old, Young, Credit Challenged
Consumer
Electronics
• Segmentation of the market
MVNOs
Retailers
• Pre and Post paid
> Consolidation
Financial
Pure Plays
• Rogers / Fido
• Cingular / AT&T
• Sprint / Nextel
• Alltel / WWC
• Regional / Super Regional
> Partnerships
• Cable / Wireless
• Wireless / Wireline
institutions
> There are currently more than 20
MVNOs in Europe today
> Virgin Mobile has shown that MVNOs
can be successful in the US market
place
> A number of strong brands and
communications companies are well
advanced in their consideration of
MVNO status
© 2005 BusinessEdge Solutions Inc. All rights reserved.
04.12.05 | Confidential | 6
Agenda
> Wireless Industry
> Becoming an MVNO
> The MVNO Eco-system
• MVNO
• MVNE
• HNO
• MVNC&SI
> Summary
© 2005 BusinessEdge Solutions Inc. All rights reserved.
04.12.05 | Confidential | 7
Reasons for Becoming an MVNO
New Products
New
Markets
Existing
Markets
Existing Products
• Bundle to improve Wallet
Share
• Mobility Based
• Greater reach and diffusion.
• Lifestyle adaptations
• Up Sell – Cross Sell
• Adaptation and
enhancement
• New Channels/outlets
• Location based
• Mobile market
• Distribution to Mobile
• Affinity relationships
• New Price and bundle plans
• Access to new customers
• Convergence
• Extended reach with lower
barrier to entry
• New channels
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Show Me the Money
Costs
MVNO
MVNO Profit
40-60%
• Network usage – access, roaming,
directories etc
• Connection fees
• Subsidies – Upgrades, promotions
etc
• Value added services
• Content fees
• IT Services
50:50
• Billing
HNO
• Voice
Access
• Basic
Services
Bad debt,
loyalty etc
Operating
Costs
10%
• Care
• G&A
30-50%
Approximate Distribution (post paid)
© 2005 BusinessEdge Solutions Inc. All rights reserved.
Key
Understanding your customers and
their usage habits e.g.:
• Overage / underage
• Churn
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Key Environmental Factors
> Host Network Operators are open to MVNOs
• Competitive rates
• Looking to improve network utilization
• Accept some loss of customer control
• Recognize price pressure
> Competitive market
> Low penetration vs potential
> Low feature function vs potential
> Friendly Regulatory regime
> Number Portability
> Under served segments
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Critical Success Factors for the MVNO
> Know the customer
> Key factors that drive brand value are:
• Have a direct relationship = lower
acquisition cost
• Market Penetration / Coverage
• Know their habits / patterns = focus the
offer
• Satisfaction (Quality of service and
Care)
• Have loyal base
• Revenue / margin per customer
> Have a strong brand
• Breadth of services offered
• Churn
• Brand value will have a significant impact
as communications service providers
move towards converged services:
• All targeting the same customers as a
means of increasing wallet share
• Defending against fast moving insurgents
with niche offerings in core areas
> Up Sell, Cross Sell & Bundle
• Companies providing multiple services
are, generally, able to generate High
Revenue Per Customer – on average
35% higher
© 2005 BusinessEdge Solutions Inc. All rights reserved.
04.12.05 | Confidential | 11
Agenda
> Wireless Industry
> Becoming an MVNO
> The MVNO Eco-System
• MVNO
• MVNE
• HNO
• MVNC&SI
> Summary
© 2005 BusinessEdge Solutions Inc. All rights reserved.
04.12.05 | Confidential | 12
MVNO Eco-System
MVNE
MVNC&SI
HNO
MVNO
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Wireless Entry Strategies
> New entrants to the wireless market have a number of options to consider
> The level of control of products, services, channels and customers will determine the
level of investment that is necessary for organizational, processes, systems and
product development initiatives
> The different options for the business model have associated risk/reward profiles that
must also be considered
Build wireless
network
H
H
MVNO / MVNE
MVNO – build
wireless systems
MVNO:
Own
systems
Control
Potential Reward
Buy wireless WSP
Buy / build
carrier or
network
MVNO – carrier
systems
MVNO/
MVNE
MVNO:
Carrier
systems
Resell – cobranded with
carrier
Resell / agent –
carrier brand
Co-brand
Reseller
L
L
L
Risk
H
© 2005 BusinessEdge Solutions Inc. All rights reserved.
H
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Cost
L
Flavors of MVNO
> Not all MVNOs are the same
> The objectives of the MVNO will affect the level of dependency and range of services that
are required from the partners
> HNO services offered vary. A gap analysis on coverage and capabilities with the MVNO
goals is an early requirement
> Identifying gaps with HNO and internal services will identify MVNE needs and role
MVNO Style
Market
Pre / Post
Wireless
Knowledge
Integration to
Business
Systems &
Processes
Low to None
Low
Low to None –
Customer
Database
Prepaid & Post
Paid
Medium to high
Low
Pre planned
Strong brand, loyal base,
content leverage
Prepaid – future
post paid
Low to none
Low
Low to None, some
customer
knowledge
Communications companies
who want higher wallet
share and improved loyalty
Post and Pre
Low to medium
Medium to High
Bundles
Extensive systems
infrastructure
Convergent
Communications companies
with vision
Post and limited
pre
Medium to high
High
Extensive systems
infrastructure
Tier 2/3 WSP’s who need
exit strategy from high
network investment
Post and Pre
High
High
Extensive systems
infrastructure
Pure Play
Repeaters
Content
Based
Converters
Highly Segmented Brand
extension
Primarily Prepaid,
Professional MVNO’s
Segmentation
Growing Post Paid
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04.12.05 | Confidential | 15
What an MVNE can do?
Logistics
Managed Service
MIS &
Admin
Back Office
Interface
Financials
HNO
Care
Center
Credit
Ref
Core
Operating
Systems
Taxation
Payment
Interface
$Banking
$$
© 2005 BusinessEdge Solutions Inc. All rights reserved.
Printing
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MVNE Market Positioning
> MVNEs form a critical component within the MVNO market
> Ensuring that the MVNE offers the services and time to market
required is critical
MVNE Capability
High
FEP B
BEP C
Ability to Execute
• The range off services
offered by MVNEs varies
greatly
FEP A
PEP A
FEP C
• For full service the
purpose designed
MVNEs are able to offer a
greater depth of:
FEP D
PEP B
FEP E
IEP A
BEP A
• Service
IEP B
BEP B
• Flexibility
PEP C
• Best in class solutions
Low
Component
Services Offered
Full
Source: BusinessEdge Research
© 2005 BusinessEdge Solutions Inc. All rights reserved.
04.12.05 | Confidential | 17
Host Network Operator
Selecting an HNO Partner depends
on the level of integration with the
MVNO core business
H
Converged
Complexity
The greater the integration required
the more sophistication is necessary
Bundle
Host Network Operators have
different drivers
• Wholesale – Focus is on driving
network use via a partner
wholesale model
Wireless
+ Data
• Customer Growth – Only
supports MVNOs that are
outside of own market focus
Wireless
L
Wholesale
Services offered
Integrated /
Custom
© 2005 BusinessEdge Solutions Inc. All rights reserved.
• Brand based – Selective about
the quality of the brand and
revenue generation potential of
selected partners
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How does and MVNC&SI Add Value?
> Entry into the Wireless Service Provider market requires careful and
detailed planning supported by flawless execution
> The role of the Consulting and Systems Integrator provides industry specific
expertise and experience supported by structure and methodology
> The MVNC&SI acts as the trusted advisor, independent of both the HNO
and MVNE
The MVNC&SI Provides:
Build and Test
Marketing
MVC&SI
MVNO
MVNE
Finance
Systems &
Services
© 2005 BusinessEdge Solutions Inc. All rights reserved.
• Strategy and Planning
• Wireless Subject Mater experts
• Business case and Operational
Models
• User Experience definition, design
and implementation
• Architecture – Process, systems and
technology
• Requirements Management
• Integration to own systems
• End to End testing
• Program Management
04.12.05 | Confidential | 19
Planning for an MVNO
> To be a successful MVNO requires careful planning
RF
Switch
NW
NW
Svcs
Apps &
Service
Billing
Care
Mktng
Sales
Mobile Network Operator (MNO)
Host Network Operator (HNO)
Mobile Virtual Network Enabler (MVNE)
Mobile Virtual Network Operator (MVNO)
MVNO Planning
Host Network Partner
Enabler(s)
> Who are my customers
> Coverage mapping
> HNO/external enabler
> What markets & channels
> Ease to deal with
> Experience
> Level of integration (business /
network / services)
> Experience / predefined interface
points
> Ability to configure / customize to fit
with MVNO systems / process
> Services to be offered – differentiation
> Partner management systems
> Partners and interfaces
> Available wireless knowledge
> Settlement / revenue assurance
> Ease to deal with
> Market acceptance and testing
> Cost
> Cost
> Time to market goals
> Time to market
> Time to market
Create Integrated Playbook
© 2005 BusinessEdge Solutions Inc. All rights reserved.
04.12.05 | Confidential | 20
Agenda
> Wireless Industry
> Becoming an MVNO
> The MVNO Eco-System
• MVNO
• MVNE
• HNO
• MVNC&SI
> Summary
© 2005 BusinessEdge Solutions Inc. All rights reserved.
04.12.05 | Confidential | 21
About the Presenter
> John Green is the Wireless Industry Partner for BusinessEdge
Solutions working in the wireless, cable / broadband and wireline
segments of the communications industry. He has more than 25
years of Operations and Information Technology experience of
both the wireline and wireless industries. John can be reached at
[email protected] or by calling 732.828.3200
> BusinessEdge Solutions is an industry-focused systems
integration and consulting firm that offers a unique asset-based
approach that blends industry experience with seasoned technical
expertise in the communications, financial services, insurance and
pharmaceutical and health sciences industries
> As an early MVNC&SI BusinessEdge is providing services to a
number of MVNOs, MVNEs and HNOs throughout the lifecycle,
from strategy to implementation
© 2005 BusinessEdge Solutions Inc. All rights reserved.
04.12.05 | Confidential | 22