The UK Computaris team attended the MVNO show in Barcelona where we were both exhibiting and presenting, and by all accounts our presentation, delivered by VP Sales EMEA, Ian Ginn, was well in keeping with the general opinions and consensus conveyed throughout the 3 days. Being an MVNO conference, the question of who was the ‘good cop’ and who was the ‘bad cop’ out of the MVNO and the MNOs was always bound to arise and the responses surprised me somewhat.
It appeared to be that the MNOs had all of the control over the wholesale rates, as well as the customers that they gave MVNOs. However, what they were willing to provide, and the extent to which they wished to engage with MVNOs, was found to have taken a dramatic change in direction. MNOs suggested that they now preferred the option of engaging an MVNE provider, or their own MVNE, in order to deal with the MVNO requests that they held, as it would give them more control, yet less contact with the MVNO provider. This direction of the market surprised me. Seeing as the MVNO was typically an extension of the MNO, this traditionally would indicate that the MNO would want more control over the actions of their subsidiary. However what was found was that the MNO would now rather just control the rates and the business that they offered the MVNO, rather than have a significant bearing on their outcome, which also surprised me.
Conference areas of interest
- Many subjects were discussed by many an esteemed speaker, one of particular interest being the fascination of the crowd at the possibility of Apple and Google becoming MVNOs. As discussed by Whitey Bluestein, of Bluestein and Associates, both of the players were in the position where they could easily finance such an endeavour and the demand for it would be great. Both players would attack the market in different ways, one through acquisition, and one through growth; however, the end result would be the same…Law suit after Law suit and unrelenting competition! One of the advantages held by Apple was that they have the ability to provision via their ITunes and are, in Whitey’s opinion, 5 years ahead of Google!
- Another area that came of great interest was the increasing number of content providers entering the market in partnership with MNOs. One of the best examples of this was in the Nickelodeon MVNO. Nickelodeon confirmed that the subscribers were actually the MNOs; however the subscribers were primarily attracted to the Nickelodeon brand, the content, and the extras offered alongside the Nickelodeon name. This was interesting as it gave operators the ability to target specific markets that they otherwise would not have considered, and in this case it was the children’s market. This point is of particular interest when you consider that 36% of new mobile subscriptions are for children! The introduction of content provider – MNO relationships appears to have opened up an additional channel to market for the operators. It is also worth mentioning that similar to Nickelodeon, MTV offer the same model, however their target market is different. They do however, focus on user experience, just as the Nickelodeon people do. This indicates that attaching an experience to mobile is key and will have a profound effect on targeting the specific market.
Main conference topics
The event revolved around two main topics – Data and M2M. Both subjects, as well as to a certain extent NFC, are considered by many, if not all, to be the future of the Telecommunications industry. They are subjects that have operators and service providers at a loss to find a way to monetize the services without losing customers, yet when services have to be so consumer-focused as a result of the competition in the market, the operators are not in as strong as a position as they once were.
- Data was an increasingly prominent subject matter and these thoughts were shared by almost all of the speakers as well as being the focus of many a presentation. The main subject around data was the question of how one would monetize it.
With an increasing array of data-focused offerings from operators, whom the majority of were finding it difficult to abandon their ‘all you can eat’ data plans, operators were interested in the need for mobile data policy and most of them agreed that the market trends were appearing to point towards a future where data was charged by service, rather than by consumption. This move would allow operators to create new revenue streams whilst also granting free access to social sights such as Facebook and Twitter. One of the problems that the operators expressed when trying to limit data use by their subscribers was that people are used to having ‘all you can eat’ bundles, and therefore would not be happening, or even be willing to change the program.
- M2M is relatively new in the market today although the technology has been around for over a decade, operating in traffic meters, digital signage, and other such everyday occurrences that we do not digest. As the market and the demand is moving towards even smarter devices such as the Kindle, operators are again looking for ways to take advantage of this demand in technology and the capabilities that such offerings can offer to their business, and ultimately their revenue. As more and more M2M providers begin to appear on the scene, there is an increase in the interest of how operators can leverage M2M knowledge in the market.
Operators are starting to look at M2M platform providers as well as looking at ways they can start to offer services to enterprises, as well as to utility companies that can further improve credibility.
In conclusion, aside from the general market trends that are beginning to focus and trend toward Data services, monetization and M2M, it was interesting to learn that the growth is starting to boom in the Middle East, as regulations are becoming more lax and the barriers of entry are lowering, whilst at the same time the markets are booming in LATAM where social media is an increasingly valuable data function. The proliferation of MVNOs in the United States is also starting to increase, from where they were previously considered a ‘dirty word’, more and more operators are starting to see and identify the value in using an MVNO as a channel to market where they can appeal to previously unfocussed segments, such as children, and in the case of Kajeet, children but through their mothers.
The Telecommunications industry is becoming increasingly ‘mobile’ in the world. It is taking up more and more significant positions in everyday life, and having more and more influence on the everyday occurrences that we take for granted. As the MVNO show indicated to us, MVNOs are having a bigger part to play in reaching out to different parts of the population. What really intrigues me is that as we talk about data moving towards being segmented by services, it is interesting if one steps back and analyses the MVNO market. What can be seen is that as technology advances, and the number of MVNOs increases, we are beginning to see a segmentation of the population by their own needs and services. Therefore it may not be as big of a surprise to see data services following suit, especially as different people have different needs.
Ben Oakford, Sales Consultant EMEA