If every great idea made the amount of money it could be worth, I’d have a lot of very rich friends. (But, in fact, I do not.) As Edison suggested when he said, “Genius is 1% inspiration and 99% perspiration,” many factors stand between a great idea and a great business. The same is true for an MVNO. In my work as a consultant, I’ve had the opportunity to hear about countless business ideas with legs at face value, but I’ve seen very few of them live up to their potential. So, what are the key reasons why a great idea for an MVNO doesn’t pan out? Here are my top 5.
1: The value proposition doesn’t address a real problem for customers.
With the advent of high-quality network aggregators and various flavors of “MVNO-in-a-box,” it is becoming easier and easier to start an MVNO. That is why I cannot overemphasize the importance of a compelling offer for your customers. You will win subscribers based on your unique value proposition and the clarity with which you explain it, not based on plan pricing or network speed. You must start with a well-defined audience and provide a simple, elegant digital solution for a problem they face. Seek out strategic partnerships that will allow you to provide discounts and special offers on products and services that your target audience already uses.
2: You chose the wrong network solution.
As I alluded to above, there are many solutions for network connectivity, and choosing the right one lays the foundation for the rest of your business model. On one end of the scale, you likely want to avoid a carrier contract that locks you into financial commitments before you have your very first customers and proof of concept. On the other end of the scale, you may regret starting off with a solution that doesn’t give you full control and flexibility to manage your customer base the way you want. Finding the right balance based on your experience and resources is key. Consider shorter-term agreements or non-exclusivity that will allow you to pivot when if and when it makes sense for your business.
3: You didn’t equip yourself with the right technology.
Playing in the MVNO space for the long run will require agility. Your ability to make the business decisions you want with as little delay as possible is essential to your long-term success. I’ve seen too many service providers handcuffed by outdated, inflexible systems that cause them to fall short of the marketplace standard. When you choose your primary technology partner (your MVNE), choose one that is forward thinking and will be happy to support your new initiatives, even when resources and development are required.
4: There are inefficiencies in your fulfillment & activation process.
In their digital experiences, customers want (and expect) convenient, simple, and virtually instant solutions. Think: one-click purchases, auto-filled information, and instant QR codes. Any resistance along the way from product choice to phone activation means lost sales. When designing your customer’s buying experience, especially if you’re sending a physical product, make it fast and overcommunicate along the way. Device has shipped? Let them know. Device is almost there? Let them know. Device has arrived? Give clear and simple steps for activation via multiple channels. The device wasn’t activated in 24 hours? Give them a call to assist. I’ve seen many situations where it might delay a launch or be more expensive to “go the extra mile” in the fulfillment and activation process, but 9 out of 10 times, the delay or expense is worth it in the end.
5: You’re not consistently engaging your customers.
According to a recent Polaris Market Research report, the global MVNO market is expected to grow from USD 85.24 billion in 2023 to USD 173.10 billion in 2032. Expect that there will be a continuous stream of new MVNOs entering the market and vying for your customers. Maintaining low customer churn rates is one of those metrics that will help to bulletproof your business. Make sure you’re not exclusively focusing on new customers and forgetting your existing ones. Create campaigns targeting your active subscribers and think of creative ways to provide them with more value. Let’s not forget the core marketing principle that it is far less expensive to keep the customers you have than it is to acquire new ones.
Overall, the MVNO/A/E ecosystem is fast-paced, innovative, and exciting. Launching an MVNO can certainly be a rewarding and lucrative endeavor, but it requires that you avoid these common mistakes.
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