Fixed-mobile convergence, the long-forgotten one?

I have revisited many blog posts published over the past few months, and even further back, and have been surprised to realize that we had not paid enough attention to the issue that matters most to mobile virtual network operators today: preserving margins and retaining customers.

There is a great deal of discussion around artificial intelligence, its opportunities, challenges, and the risks surrounding the technology. Likewise, many articles focus on the benefits and commercial potential of eSIM, as well as 5G and beyond. These are all important topics, but they are not necessarily the ones that solve the immediate commercial problem faced by many MVNOs.

I very much appreciate Mark Prudhoe’s perspective in his article, The New MVNO Playbook, on MVNO 3.0. It reflects what many network operators are already doing. Telefónica is a clear example: it does not only provide mobile services, but also FTTH (including internet access, and telephony), streaming services, and even home and enterprise security connectivity services through Prosegur. These are precisely the kinds of integrated offers that a standalone MVNO often cannot capture.

In practice, this is also what we see every day. We participate in multiple consulting engagements with established MVNOs to help define their future strategy, and we have also been involved in creating a new MVNO, Zeeby. The conclusion is consistently the same: when a business is based solely on mobile services, user retention becomes a significant challenge.

1. The Commercial Challenge

How can an MVNO maintain healthy margins when the end-user price per gigabyte continues to decline, while voice and messaging are increasingly included at no visible additional cost? The answer lies in convergent offers.

Our discussions with network operators across different countries, and with MVNOs built on very different ADN profiles, lead us to the same conclusion: fixed services; primarily fibre-to-the-home, or its mobile equivalent, Fixed Wireless Access (FWA), positioned as a substitute for fibre; are what make it possible to improve margins and reduce churn.

2. Conclusion

For this reason, in our day-to-day work we have naturally incorporated both the revenues and the costs associated with home internet access; in practice, fibre delivered to the home and, in some cases, bundled services such as fixed telephony, into the tools we use to build the business plans of the MVNOs we support.

And what it is most important, in our discussion and negotiation with the host operators.