How do you differentiate as an MVNO?
There is a new breed of MVNOs in town.
I recently came back home after a week in sunny Valenica for this years MVNO nation. This is a event where industry experts, aspiring MVNOs and wholesale departments meet to discuss challenges, regulation, learnings and most importantly, market trends and differentiation tactics. It’s a nice mix of rivalry, friendship and humble competition in a beautiful and inspiring setting. I was fortunate enough to host both a roundtable as well as to participate in a panel where we discussed MVNO differentiation.
So why am I mentioning this? Well, because it triggered the topic of this opinion piece and it made me reflect on the MVNO industry as a whole and where it’s heading.
Where's the Brad Pitt MVNO?
It’s no doubt that the MVNO space is very competitive in most markets, and to be fair, most MVNOs offer similar value propositions. To compete on price in the retail market with a fully digital offering towards a tech savvy younger population is as common as Costa del sol is as a summer destination for Swedes. So how do MVNOs ensure that they don’t become as mainstream as the average Swede on a summer holiday?
Well, the simple, yet complex answer is that you need to differentiate from the competition to become profitable as an MVNO. First of all, it’s important to decide on a clear value proposition. What are you bringing to the market that no one else does, or even can do? You might feel that this is me stating the obvious but you would be surpirsed how many aspiring MVNO founders I meet that believe that they will be able to do the same thing as everyone else and achieve a different result (hello Einstein).
You can start by asking yourself the following four questions:
Do you have a great relationship with your network provider (aka a good commercial deal) that enable you to compete in the retail market on price? If not, you will never see profitability in such an offering as competition is fierce, especially from the sub/fighter brands.
Have you identified a certain demographics with a specific need that they are willing to pay a premium to fulfil? If yes, great for you since you can target the retail segment without competing on price as the main driver.
Why not targeting the extremely underserved SMB segment? To succeed in this segment you need to ensure that your customer journeys and value proposition is properly targeted towards this segment. Online sales, fulfilment and admninistartion all has to be extremenly easy and the product offering must simplify the lives of small businesses and not add more complexity.
Do you have an existing brand that has high recognition and trust that you can leverage such as Redbull or Brad Pitt? Bare with me, I’ll get back to this in a second.
This advise can be applied by independent MVNOs no matter if they are already operational or if they are starting fresh, as well as MNO sub brands. On top of this it’s of course important to also take into consideration the market you are operating in. The Scandinavian market is quite saturated within both B2C and B2B and would benefit from more nisched players targeting certain demographics. However, continental Europe, UK and the US for example are more or less untouched in terms of B2B. Understand yor market as well as your strengths and build a proposition in that intersection.
But what about question number 4? During my panel debate in Valencia I received a question from the audience how I believe that wholesale departments can differentiate from other MNOs
My answer somewhat divided the audience, some loved it and some thought that I was joking.
The concept of a branded reseller approach is not new, but what we already see and will see even more going forward are existing (non-telecom) brands that launch MVNOs with a value propostion that attracts the target audience merely through the brand. This is an old trick when it comes to marketing in general (sports people promoting Coca Cola etc. which obviosuly doesn’t make any sense) but this is somewhat new for MVNOs. We’ve seen it with Mint mobile in the US that more or less equals Ryan Reynolds at this point. Mint mobile grew its customer base in record speed and was recently acquired by T-mobile US. A1 Austria has launched Redbull mobile that offers roaming via an e-sim solution that they distribute via a reseller model with other MVNOs. Uber is looking to launch an e-sim offering for roaming to all its millions of users.so why wouldn’t any of the other tech giants contemplate the same?
Even AC Milan has their own MVNO and considering the dedication from fotboll fans I’m sure that will be a success within the nisched target group.
So, remember where you heard about the Brad Pitt MVNO first.
Originally published in Telekomidag
Contact us on sales@telnesstech.com to hear more about how we can help you differentiate your wholesale strategy.