Typically seen as the scrappy younger contender to the more traditional larger players in the telecommunications sector, Mobile Virtual Network Operators, or MVNOs as they are commonly known, have long challenged the current market setup. However, having only made incremental gains over the years, many MVNOs now look set to see their fortunes change significantly. This year more than any other, appears to be heralding a significant step change for MVNOs as they find themselves the potential saviours of a burgeoning telecoms sector. One which so far has been unable to move swiftly enough to serve the changing customer needs impacted by Covid and the cost-of-living crisis, says Mo Firouzabadian, CEO, Lifecycle Software.
With the ongoing rise in food and energy prices hitting a 40 year high and inflation edging towards double figures in the UK, many consumers are understandably choosing to tighten their belts, hoping to spend less on much-needed public services. However, with Covid accelerating the work-from-home culture and hybrid set-ups becoming a permanent part of many companies’ day-to-day operations, lots of consumers have found themselves more reliant on their mobile services than ever. Consequently, the public’s use of data services has rocketed.
Perhaps unsurprisingly, a recent survey from Cable.co.uk put the UK in 59th place for mobile data costs, with 1GB of data coming in at an average cost of $0.79. Although this makes data more expensive than European neighbours Italy ($0.12) and France ($0.23), it’s still significantly cheaper to buy data in the UK than in all the Northern American countries. Faced with consumers expecting more from their digital experience for less, MVNOs more than any other group in the telecoms sector seem uniquely placed to adapt to these new demands, especially if they can streamline operations to bring data costs down across the telecom order to cash process.
With MVNOs able to pivot their service offerings at speed, they are perfectly poised to address the emergence of a new set of customer mobile behaviours and demands, where consumers are now expecting more diverse, differentiated, and value-added services. Customers are continually engaging online in new ways, with streaming services, gaming, video conferencing and more becoming part of everyday activity. What puts MVNOs at the forefront of the sector is their ‘digital first’ mindset alongside their customised approach, which when combined also serves to deliver a highly effective financial proposition.
MVNOs have long been able to leverage the latest technological breakthroughs, enabling them to offer some of the best value deals in the market to their customer base. Alongside this, they have chosen to cater to sectors of the market seemingly abandoned by the larger players, such as SMEs, and younger and older market segments that have more specific needs from their network operators.
This has resulted in MVNOs laying the necessary foundations needed to corner parts of the market while slowly destabilising the stranglehold the larger more traditional telco players have had to date. Now with the added pressure for more mobile and data services at affordable prices, trust is growing amongst consumers and any remaining potential customers are sitting up and taking note of the fact that the MVNO offering might be a very real and better value proposition.
To continue their journey to the very forefront of the industry and stay there, MVNOs must continue to evolve their ‘digital first’ mindset even further. Internal digital transformation is integral to business models that rely on helping customer digitise, and MVNOs can meet these demands through the continual adoption of the latest technologies. Couple this with their expertise in customising their offering, and a perfect recipe presents itself for MVNOs to draw in new prospects while simultaneously boosting customer retention. Some of the technologies for MVNO consideration should include the Internet of Things (IoT), M2M, Artificial Intelligence (AI), Edge Computing, and 5G, all of which will provide access to the future, opening the door for many MVNOs to extend their service offering even further.
AI, for example, can better support MVNOs connect with their customer base by enabling enhanced customer personalisation, and Edge Computing allows MVNOs to offer services that reduce latency by processing device data closer to their creation point instead of sending it long distances to do the same, for instance to the cloud. 5G can support by significantly boosting the MVNO offering for customers immediately. Courtesy of the technology, SMEs for example, can better connect to big data and cloud services that were traditionally the reserve of large corporations.
Different sectors should also be a consideration. While the B2C sector has been the traditional stomping ground for the MVNO, the ability to capitalise on technologies that better facilitate the processing of data makes MVNO a natural choice for the B2B sector too.
Naturally data-heavy, the B2B sector is crying out for the high-value propositions offered by MVNOs. This way it can better serve its customers who are looking for faultless connectivity and expert customisation, all at better pricing due to the cost-of-living crisis hitting businesses hard. By becoming a trusted partner to the B2B sector, MVNOs not only can reign over the B2C sector but take control of a hugely scalable opportunity within the B2B sector too.
When it comes to vertical-specific sectors, one area ripe for MVNO pickings is the financial technology sector. The growth in mobile banking and mobile payments has been nothing short of aggressive, providing ample opportunity for MVNOs to create partnerships that will facilitate the processing of the resulting data effectively and cost-efficiently. Other business development areas worth exploring include IoT (Omdia forecasts 2.6 billion connections by 2025), and private networks where MNOs provide the infrastructure, leaving MVNOs to seize the opportunity to create services informed by specific customer needs. The creation of MVNOs is also the most popular way for service providers to adopt multi-brand initiatives to appeal to new market segments. More MNOs are implementing multi brand strategies with the help of MVNE multitenant platforms.
As for the future, no doubt the customer landscape will continue to evolve and change rapidly. MVNOs should make it a priority to bring continued operational efficiencies where possible and if they can maintain their reputation for innovation and value within a staid telecommunications industry, they have a real opportunity to present customers with a set of new high-value experiences that will be hard to resist. This in turn will guarantee that they are no longer the industry’s scrappy underdog but the real champions of an increasingly insipid industry.
The author is Mo Firouzabadian, CEO, Lifecycle Software.
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