Comments on: The Future of Data Only MVNOs http://www.telecomcircle.com/2009/04/the-future-of-data-only-mvnos/ Telecom Circle analyses the latest trends and services within the Wireless and Internet space. Fri, 03 Feb 2012 20:56:32 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Mohit Agrawal http://www.telecomcircle.com/2009/04/the-future-of-data-only-mvnos/comment-page-1/#comment-434 Mohit Agrawal Thu, 23 Apr 2009 05:13:04 +0000 http://www.telecomcircle.com/?p=496#comment-434 The consumers would continue to use voice but what I envisage is that voice would be provided by the operator or a voice MVNO and there would be data only MVNOs which would be primarily content providers. So the game would come bundled with bandwidth and the game owner would be data MVNO. Customers would not sign up separately for Data MVNOs. In fact they would not even be aware of it and will get the data bundled with the service. The consumers would continue to use voice but what I envisage is that voice would be provided by the operator or a voice MVNO and there would be data only MVNOs which would be primarily content providers. So the game would come bundled with bandwidth and the game owner would be data MVNO. Customers would not sign up separately for Data MVNOs. In fact they would not even be aware of it and will get the data bundled with the service.

]]> By: Topics about Stephen-smith » The Future of Data Only MVNOs | Telecom Circle http://www.telecomcircle.com/2009/04/the-future-of-data-only-mvnos/comment-page-1/#comment-433 Topics about Stephen-smith » The Future of Data Only MVNOs | Telecom Circle Wed, 22 Apr 2009 22:46:33 +0000 http://www.telecomcircle.com/?p=496#comment-433 [...] Mohit Agrawal placed an observative post today on The Future of Data Only MVNOs | Telecom CircleHere’s a quick excerptThere can be other general data services such as GPS / Navigation handhelds which can be looked at for Data Only MVNO business models. Text SMS included, general infotainment handheld can be one such device that can be developed to make … [...] [...] Mohit Agrawal placed an observative post today on The Future of Data Only MVNOs | Telecom CircleHere’s a quick excerptThere can be other general data services such as GPS / Navigation handhelds which can be looked at for Data Only MVNO business models. Text SMS included, general infotainment handheld can be one such device that can be developed to make … [...]

]]> By: Jan Robin Stenmo http://www.telecomcircle.com/2009/04/the-future-of-data-only-mvnos/comment-page-1/#comment-431 Jan Robin Stenmo Wed, 22 Apr 2009 21:21:52 +0000 http://www.telecomcircle.com/?p=496#comment-431 In the Scandinavian market, and specifically Denmark, MVNO business models have been quite successful. In the end. By offering stripped down service (no customer service, web-based payment up front, no sponsored phones) they avoided many of the basic customer maintenance expenses of the real mobile operators at the time. They attracted significant numbers of customers. I do not feel confident that they really made money. But anyway, they drained the mobile operator customer numbers. In the end the two major MVNO's were sold to the two major mobile operators for large money. This was also a good way of making big money in short time. Currently, the major MVNO's are still owned by the mobile operators. This give the operators the opportunity of maintaining their own quality brand with a broad range of services, call centres, sponsored phones etc for the customer segments with these preferences and at the same time offer a stripped down basic service to other customer segments without confusing their message. Currently in Denmark, the 4 major MVNO's are all owned by mobile operators, and they seem to provide attractive services and atract good customers. By focusing on the basics for low end segments, they can survive with very limited organisations. I would agree that it has become a strange kind of MVNO when it is owned to the mobile network operator, but it still operates according to MVNO regulations, and a quite limited market (5-6 mio population) has a wide range of service proposals. The initial cost of starting up a MVNO today is very limited. This service is offered commercially for 7.000 USD by https://www.mvno-systems.dk/Default.aspx and you are on the market within 30 days. This attracts interrest outside the traditional telecom business area, as local companies, radio stations, workers unions, etc, generally companies with a high brand visibility locally or nationally. There are 8 operators in DK with more than 1% of the total market share. But the last 6,8% of the market is shared between 50-60 minor MVNO with all less than 1% of the total market share. Over the last years the total market volume of these minor MVNO's have grown significantly. They are mainly hosted services, which means that they have no day-to-day work related to this business area. They are simply utilizing their brand value. In some cases they are local or regional FTTH operators in need of a bundled offer including mobile services. The mobile network operators have 73,8% of the total market. The two main MVNO (owned by mobile network operators) have 15,3%, which points in the direction that about 11% of the customers are served by MVNO with no mobile network operator ownership. In the 3G market the network operators have 88,1% of the total market. The two main MVNO (owned by mobile network operators) have 7,9%, which leaves only 4% of the market to the MVNO's without mobile network operator ownership. And the number of companies in this last segment are very few. And this reflects on the business model that MVNO only offer basic service / low cost, and 3G is still not considered basic service. These date are 6-12 months old, and this is about to change now. There is no indication telling me that this is a market or business model heading for disaster. It seems to provide certain opportortunities and benefits to all parts of the business model (consumers, MVNO, mobile network operator). This was just to show an example of a market where the MVNO business model is working well. It may not be the case in certain other markets, depending on regulation and other external conditions. In the Scandinavian market, and specifically Denmark, MVNO business models have been quite successful. In the end. By offering stripped down service (no customer service, web-based payment up front, no sponsored phones) they avoided many of the basic customer maintenance expenses of the real mobile operators at the time. They attracted significant numbers of customers. I do not feel confident that they really made money. But anyway, they drained the mobile operator customer numbers. In the end the two major MVNO’s were sold to the two major mobile operators for large money. This was also a good way of making big money in short time.

Currently, the major MVNO’s are still owned by the mobile operators. This give the operators the opportunity of maintaining their own quality brand with a broad range of services, call centres, sponsored phones etc for the customer segments with these preferences and at the same time offer a stripped down basic service to other customer segments without confusing their message. Currently in Denmark, the 4 major MVNO’s are all owned by mobile operators, and they seem to provide attractive services and atract good customers. By focusing on the basics for low end segments, they can survive with very limited organisations. I would agree that it has become a strange kind of MVNO when it is owned to the mobile network operator, but it still operates according to MVNO regulations, and a quite limited market (5-6 mio population) has a wide range of service proposals.

The initial cost of starting up a MVNO today is very limited. This service is offered commercially for 7.000 USD by https://www.mvno-systems.dk/Default.aspx and you are on the market within 30 days. This attracts interrest outside the traditional telecom business area, as local companies, radio stations, workers unions, etc, generally companies with a high brand visibility locally or nationally. There are 8 operators in DK with more than 1% of the total market share. But the last 6,8% of the market is shared between 50-60 minor MVNO with all less than 1% of the total market share. Over the last years the total market volume of these minor MVNO’s have grown significantly. They are mainly hosted services, which means that they have no day-to-day work related to this business area. They are simply utilizing their brand value. In some cases they are local or regional FTTH operators in need of a bundled offer including mobile services.

The mobile network operators have 73,8% of the total market. The two main MVNO (owned by mobile network operators) have 15,3%, which points in the direction that about 11% of the customers are served by MVNO with no mobile network operator ownership.

In the 3G market the network operators have 88,1% of the total market. The two main MVNO (owned by mobile network operators) have 7,9%, which leaves only 4% of the market to the MVNO’s without mobile network operator ownership. And the number of companies in this last segment are very few. And this reflects on the business model that MVNO only offer basic service / low cost, and 3G is still not considered basic service. These date are 6-12 months old, and this is about to change now.

There is no indication telling me that this is a market or business model heading for disaster. It seems to provide certain opportortunities and benefits to all parts of the business model (consumers, MVNO, mobile network operator).

This was just to show an example of a market where the MVNO business model is working well. It may not be the case in certain other markets, depending on regulation and other external conditions.

]]> By: djkoeman http://www.telecomcircle.com/2009/04/the-future-of-data-only-mvnos/comment-page-1/#comment-430 djkoeman Wed, 22 Apr 2009 20:14:39 +0000 http://www.telecomcircle.com/?p=496#comment-430 I fail to see the niche market/target group for data only. MNO's offer both voice and data, so why would you only ake one? Only when data-centric networks (WIMAX) start picking up, I could envisage data only MVNO's. Of course, MVNO's could (again, based on customer needs) focus more on data, but why not take the full suite of products? Unless of course as MVNO you intend to invest in your own back-end (GGSN, data billing engine, GW, etc.) and don't want to spend the additional buck on VMS, SMS-C, etc. Still, I would see only extremely limited market for that, as most customers will also use voice at some point..... I fail to see the niche market/target group for data only. MNO’s offer both voice and data, so why would you only ake one? Only when data-centric networks (WIMAX) start picking up, I could envisage data only MVNO’s. Of course, MVNO’s could (again, based on customer needs) focus more on data, but why not take the full suite of products? Unless of course as MVNO you intend to invest in your own back-end (GGSN, data billing engine, GW, etc.) and don’t want to spend the additional buck on VMS, SMS-C, etc. Still, I would see only extremely limited market for that, as most customers will also use voice at some point…..

]]> By: Peter Pudaite http://www.telecomcircle.com/2009/04/the-future-of-data-only-mvnos/comment-page-1/#comment-429 Peter Pudaite Wed, 22 Apr 2009 11:07:14 +0000 http://www.telecomcircle.com/?p=496#comment-429 The success of an MVNO has to be based on some USP not directly related to the underlying service. USPs can be such things as brand association, captive markets or other complimentary services. The MVNO model has systemic competitive disadvantage which is that the underlying operator will always have a cost advantage. The failure of many MVNOs were rooted in not offering something that could be had cheaper from the network operators. Virgin Mobile in the UK for example leverages the Virgin brand and bundled offerings from other Virgin group companies something that can't be reproduced by other network operators. The underlying structure of the competitive landscape is no different for data services. So services such as Whispernet have a USP in that they have a captive Kindle market but rather than milking the data service revenue, Amazon expects to generate more revenue through sales of ebooks. Fundamentally the failure or success of a data MVNO will depend on being able to either generate revenue from another source resulting from the availability of the data access other than data charges or from providing a service mix that can not be replicated by the underlying network operator. In the latter case a company nearly has to look at the data service as a cost of sales. The reality is that basic services for voice and telephony are rapidly becoming commodities and replaceable with other technologies. Your examples of M2M communications all have something in common, that the primary revenue is generated from another service. The success of an MVNO has to be based on some USP not directly related to the underlying service. USPs can be such things as brand association, captive markets or other complimentary services. The MVNO model has systemic competitive disadvantage which is that the underlying operator will always have a cost advantage. The failure of many MVNOs were rooted in not offering something that could be had cheaper from the network operators. Virgin Mobile in the UK for example leverages the Virgin brand and bundled offerings from other Virgin group companies something that can’t be reproduced by other network operators.

The underlying structure of the competitive landscape is no different for data services. So services such as Whispernet have a USP in that they have a captive Kindle market but rather than milking the data service revenue, Amazon expects to generate more revenue through sales of ebooks. Fundamentally the failure or success of a data MVNO will depend on being able to either generate revenue from another source resulting from the availability of the data access other than data charges or from providing a service mix that can not be replicated by the underlying network operator. In the latter case a company nearly has to look at the data service as a cost of sales. The reality is that basic services for voice and telephony are rapidly becoming commodities and replaceable with other technologies. Your examples of M2M communications all have something in common, that the primary revenue is generated from another service.

]]> By: Satyanarayana Pillamari http://www.telecomcircle.com/2009/04/the-future-of-data-only-mvnos/comment-page-1/#comment-428 Satyanarayana Pillamari Wed, 22 Apr 2009 10:07:05 +0000 http://www.telecomcircle.com/?p=496#comment-428 A very good article on data VAS indeed! The data applications and their usage has been in discussion of various VAS forums for many years now, but what lacks is the take up of these applications by the VAS industry. Wireless definitely adds the remote arm to the common man but the VAS industry need to be patient for the returns on their investment till the end user becomes dependent on these applications. The Amazon and Dell examples are niche markets and will only appeal to the big guys with no focus on the return on their investment and may be they can write off their investment as value addition / product differentiation. Are we looking at these guys to promote the Data MVNO model? It may not be the answer to the Data MVNO model etal. There can be other general data services such as GPS / Navigation handhelds which can be looked at for Data Only MVNO business models. Text SMS included, general infotainment handheld can be one such device that can be developed to make carrier / operator friendly Data MVNO model. But the bottom line is the service should be broad based to appeal to the masses and VAS industry at the same time. A very good article on data VAS indeed! The data applications and their usage has been in discussion of various VAS forums for many years now, but what lacks is the take up of these applications by the VAS industry. Wireless definitely adds the remote arm to the common man but the VAS industry need to be patient for the returns on their investment till the end user becomes dependent on these applications.

The Amazon and Dell examples are niche markets and will only appeal to the big guys with no focus on the return on their investment and may be they can write off their investment as value addition / product differentiation. Are we looking at these guys to promote the Data MVNO model? It may not be the answer to the Data MVNO model etal.

There can be other general data services such as GPS / Navigation handhelds which can be looked at for Data Only MVNO business models. Text SMS included, general infotainment handheld can be one such device that can be developed to make carrier / operator friendly Data MVNO model. But the bottom line is the service should be broad based to appeal to the masses and VAS industry at the same time.

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