Shape Shifters – MVNOs as Digital Transformation Catalysts

Introduction

In 1995, Treacy and Wiersema published a framework called Value Disciplines in their work “The Discipline of Market Leaders.”  The centre of attention is the nature of the paths to creating value.  In this framework they propose three paths: Customer Intimacy, Operational Excellence and Product Leadership.  The core principle underlying this framework is that while the three are interconnected (and none can be excluded,) competitive differentiation stems from a sustained anchor value discipline.  This article examines some options for mapping this framework to move the needle for MVNOs to become shape-shifters of the digital era.

Overview of the Value Disciplines

Customer Intimacy focuses on understanding the needs of the buyer / buyer segment in depth and tailoring the product / service to that buying trigger.  In the context of modern personalization / hyper-personalization, especially with the use of AI, this is a powerful frame of reference.

Operational Excellence emphasizes removing / reducing friction in execution – finding an optimal balance between product quality and cost of taking it to market.  Modern use of value streams looks at eliminating waste in the process, and the application of this will involve automation, integration, observability, reporting and proactive interventions.

Product Leadership prioritizes the creation of distinctive offerings which stand out from the crowd for the target segment /s.  In the modern era, it requires a powerful ecosystem of partners to be nimble enough to innovate in anticipation or respond with swiftness to market influences.

Applying the Framework to MVNOs

While all three disciplines are crucial, this article leverages the principle of the framework (anchor value discipline) to outline strategic options for MVNO leaders.

Customer Intimacy

This simply talks to the foundation of customer value lying in understanding that customer segment (or segments).  There are two aspects to customer intimacy – distinct but tightly coupled:

1. Understanding the customer and hyper-personalization
2. Consistently ensuring that the promise is fulfilled

A few key points related to each of the above are provided here; for more details, a useful reference is an earlier article on MVNO Index, where Nilesh Raghuvanshi delves into the world of Customer Experience (The Next Frontier of MVNO CX Personalization, Proactivity, and AI)

• Profiling prepaid subscribers based on their spend and usage to create micro-credit products
• Correlating location-based performance degradation or fault conditions working with the MNO data, correlating it with customer location and proactively notifying customers
• Customers facing bill shock can be notified and migrated to spending-cap plans.
• Hight data usage customers who are using data for video streaming or OTT can get bundled OTT subscriptions with add on data packs offers.
• Offer Data gifting, sharing and addon data pack options for friends and families which has uneven usage history.

Startup MVNOs of course do not have the customer data to pursue this nuanced approach; however besides identifying potential sources to acquire that data (partners in retail, banking or even the host MNO itself), MVNOs can identify market research data for this purpose.  Existing MVNOs who choose to anchor their strategic growth on this aspect will need to consider the following application of the value disciplines:

Customer Understanding – data engineering, followed by three lenses: Business Intelligence for hindsight (what happened and why), Analytics for insight (what is happening) and AI/ML for foresight (what are the likely trajectories)

Operational Excellence – Simplify the lead-to-cash process and automate it; tighten the ticket-to-resolve process through tools and customer notification

Product Leadership – Simplified product portfolio for target segments, with the right pricing, and efficient execution to preserve margins

The same principles can be applied to enterprise segments, considering SMMEs, professionals and hyper-personalizing offers to these segments.

Operational Excellence

The heart of operational excellence at an MVNO level (even a full MVNO) lies in service delivery.  An MVNO is not a telecom network operator but an edge service provider.  Service Providers have two legs on which their businesses stand:

Service performance to the client – High quality service performance depends on profiling the target market and customer segments precisely, identifying the core value proposition for this segment and delivering that value proposition at the least cost while preserving acceptable quality of experience.  The difference between a value discipline anchored in customer intimacy vs operational excellence  is delighting the customer vs. acceptable quality for an attractive price.

Cost management – through a combination of good wholesale network agreements, supplier prices and terms, API management, workflow automation and the use of AI Agents, an MVNO can work a structure around reducing both friction and cost.  

Partnering – The right kind of partnering can help reduce customer acquisition costs while enhancing the value proposition.  For further reading on partnering, see Partnering for Prosperity Digital Fabric in Telecom. 

The entire emphasis of operational excellence as the anchor value discipline is attractive offering, attractive price at an acceptable performance and terms.

Product Leadership

The old world of product development was to develop a product based on certain inputs and find customer for the product.  In the modern era, this is inverted – understand what markets and customers are looking for and importantly why.  Then create an offering which appeals to that buying behaviour – this could sometimes be a bouquet or portfolio of products and services.

There is a symbiotic relationship between customer intimacy and product leadership in that without feeling the pulse of the customer a product could miss the key buying triggers of the customer.  However, the level of depth in customer intimacy is about hyper-personalization while this value discipline is about sufficient common ground and scale (bringing the link to operational excellence.)

Key components of product leadership:

Distinctive and precise point of entry into the market – e.g. a micro-credit offering targeted at a particular LSM, appealing to common characteristics of the segment and focused on generating uptake.

Moat based on churn being unattractive to customers – creating a combination of value, cost, experience in a mix such that the perceived value of a competitor’s offering is not attractive enough to endure the friction of the switch.

The Fabric

As with any business entity in any sector, the heartbeat of an organization is its people.  In such a fast-changing era, an MVNO has to think differently about its people and talent from a conventional telco / ISP / MVNO 1.0.  Key enablers such as a Talent Hub, multi-disciplinary teams, cross-functional exposure, liquid workforces, talent ecosystems, are essential and they fuel the value disciplines.

Flexible and agile, innovative commercial models for customer-facing products and services, creating differentiated supply-side relationships linked to input costs, customer value and operational efficiencies are a key force multiplier

Most importantly, an MVNO is a platform organization, not an infrastructure organization and the platform economy is a highly rewarding one.  Platforms refer to a nucleus of technology based on components, microservices, integration, data engineering and ecosystem partnerships.

Lastly, governance, risk, compliance and sustainability are a ticket to the game and not a differentiator, though the mechanisms of sustainability offer room for innovation on their own. However, these are more likely to contribute to operational efficiency and transparency than competitive advantage.

Conclusion

The digital era forces sharp questions on the idea of value and the duration of that value; customer loyalty is earned with a substantially greater effort than earlier eras.  In an era of such shifts, MVNOs have a great opportunity to become shape shifters and be the catalysts of digital transformation.