MVNOs World will shine a spotlight on the difference between success and failure

The MVNx ecosystem is buoyant with activity, boosted by the wave of announcements we’ve seen come from all corners of the commercial world. From the boom in travel eSIM to retailers like Lidl proposing 30 MVNOs across Europe with 1 Global, and the likes of Monzo and Klarna rumoured to be joining the fray, there’s a lot to look forward to.

The numbers speak volumes too, as Prescient Strategic Insight’s latest research shows. It predicts that the MVNO market will jump from $92 billion valuation today to $155billion in the next three years. The numbers represent the pace of the market, the innovation and the entrepreneurial spirit behind MVNO success.

Regulators are helping to accelerate the growth

In fledging markets, where there is a need for more competition and consumer choice, regulators are offering licences and mandating wholesale access. It’s a way to promote innovation and challenge the position of the incumbent MVNOs who may have settled into a competitive status quo, which does not benefit consumers.

In mature markets, where we are seeing significant operator consolidation, again the regulators turn to the MVNOs to drive better value through competition. In multiple European markets we have seen regulatory remedies that stipulate MVNO access and even regulated commercials. Regulators know that a challenger MVNO can really shake up a market and change the whole consumer landscape.

If you need evidence of this, just look at Walmart’s Bait in Mexico. By leveraging its retail customer access and linking the mobile business to the retail business through retail incentives and promotions, Bait has managed to achieve 18% market share, beating two of its competitor mobile network operators.

There are also interesting new angles popping up. Take Honest Mobile’s approach to overcome sketchy network connectivity. It’s offering UK consumers one SIM that connects to four networks. Innovative and solving a pain point.

But there are also lesser-known success stories where MVNOs aimed at large enterprises are being developed in line with innovations in IoT and wearables. MVNOs really do come in all shapes and sizes.

Overall, these MVNOs have approached a problem with a ‘we can do it better’ ethos and in some cases, it has taken incumbents by surprise.

Success needs more than a great idea

Yet a great idea and freedom to innovate are not the only ingredients for success. None of this happens by chance. It’s taken hard fought negotiations for wholesale rates, true and detailed insights of consumer behaviour, wants and needs, and careful technical planning so every promise can be delivered. It’s complex and risky to launch an MVNO. Don’t let anyone tell you otherwise.

And then there’s the matter of running an MVNO. Build it and they will come simply doesn’t hold true in this world. Keeping the brand buzzing in market is relentless and takes skill.

It’s clear none of this is putting people off and given the context above, I personally think the retail MVNO market especially, could spike in the next two years.

Travel eSIM a growth segment for MVNOs

The travel eSIM market is certainly having its day being applied across travel, transport, retail and fintech sectors, all aimed at launching tailored connectivity solutions for international travellers who don’t like roaming rates.

Simple, affordable connectivity is now as easy to buy and use as suncream. Consumers love it, and they will shop around for the best deal. Clever propositions that bundle in great travel money rates and offer it as an add on to your flight ticket are certainly winning the race.

More than this, travel eSIMs are a gateway product. A way for new MVNOs, or well-known consumer brands to get into market with a simple low risk offer that solves a customer pain point. Once they have proven that consumers will buy from them it opens the option of more complex “primary SIM” offers.

In essence, once established, the proposition can be developed, drawing in more consumers, and growing existing ones. It’s a model I advocate and we’re busy helping our clients deliver. Even MNOs are getting in on the act, another demonstration of how important this market is becoming.

But for all the success stories, there are many that have failed, caught up on the idea rather than the execution.

You need strategic clarity, dedicated resources, and the support of expert advice at one or all stages of development to give you a fighting chance at success.

How do you ensure you’re a winner?

At the heart of the model is this question ‘Why would customers choose our service?’. Successful MVNOs answer this question by solving a customer problem and then identify how they position their solution as different and exciting.

I recommend new MVNOs move through five stages to launch, starting with customer experience and acute focus on a need. Without this there’s no business case. If you can’t be sure what your customers want, and why they would buy it from you, then you can’t possibly calculate the cost to serve, margins and growth rates.

Nor can you pitch the idea to an operator. They won’t entertain a discussion if the strategic foundations are not in place. Afterall, there are plenty more fish in the sea.

The stages that come after this focus on how you will deliver it technically and operationally. Tech is shiny and it’s often where people get caught up and lose sight of what they are doing and why. Often the best technical implementations offer the simplest user experience, dependent on a MVNx supplier that understands the market and can do the integrations and development efficiently and effectively.

Then of course you must sustain your brand and keep it relevant, so you grow and acquire more customers. So many brands fail to plan for this. Always be selling, is my motto.

This is where advice and education can make or break an idea. If you’ve spotted an opportunity then talk to an expert in the market, develop the thinking, evidence the notion and then work on the business case.

Better still get them to pitch to the wholesale teams with you and negotiate your deal. They have the experience to get you over the line and into market fast. The investment will be worth it, making the difference between whether you’re part of the boom or just going bust.

At MVNOs World, I will be giving masterclasses on how to design, execute and sustain an MVNO. If you’re attending then reach out to me to book a free space.