What’s the most important clause to put into an MVNO wholesale agreement with an MNO? A question that comes up in every masterclass I run, all over the world.
It’s a tough question to answer as wholesale contracts are complex. But certainly, in my ‘top 5’ of most important clauses, is one that deals with network and technology parity of access.
This is a contractual clause that gives parity to any developments to existing technology or the introduction of new tech. It provides a way to compete in the market on fair terms (you’re not a B-grade network) and it gives you a consistent service upon which to build a brand’s reputation.
Parity matters as we enter a new era of digital services
Given the wave of announcements about satellite to mobile communications, this advice couldn’t be more pertinent for virtual operators.
But before I dive into why parity matters, let’s look at the process markets around the world will be going through as satellite to mobile takes off.
It’s a given that all kinds of mobile technologies are being developed globally and very rapidly. But before any can go to market, there are some regulatory steps that need to happen to approve them for consumer use. As an example, Ofcom, the UK’s regulator, has given the go ahead for mobile spectrum to be used to facilitate direct satellite to mobile, and set out the terms for use.
Under Ofcom’s guidance, companies that launch services will need to ensure they put in place measures to protect airspace. We should expect services designed for emergency or ‘light’ data use where there’s no traditional mobile coverage (ideal for rural communities).
Tech firms drive innovation, but the regulator is the gatekeeper
Two things come from these sorts of regulatory decisions, wherever they happen.
Firstly, although the tech firms drive innovation, it’s the regulator that is the gatekeeper, ensuring that regulations keep pace with innovation, and most importantly, for the protection of all concerned. Only when that is in place can MNO/MNXOs take advantage of the technology.
And secondly, once the option to launch is there, things move quickly: In the US, T-Mobile started its push into mobile to satellite last year. Virgin Media O2 began advertising its service in the UK this year following a deal with Starlink, and Vodafone has announced customer trials for summer 2026 thanks to its tie up with AST Space Mobile.
And to highlight the pace of innovation further, Deutsche Telekom expects to launch data, voice and video services by 2028 – a far more advanced proposition than ‘light touch’ services.
Where do MVNOs come in?
The crucial take away for MVNOs, is that the race is ON. MVNOs can’t afford to fall behind. More critical is the fact that MVNOs can only join the party alongside MNOs if they have a wholesale agreement that offers parity.
Without it, they’ll need to think about how they can negotiate a deal directly with the satellite providers, or a new deal with their host.
I always think it’s worth the commercial discussion with your host first. As they say, if you don’t ask, you don’t get.
But don’t forget you’re negotiating access to a premium product, one MNOs and satellite providers will want to get into the market through a mix of distribution channels. You’ll need to be able to deliver.
What won’t you get when negotiating parity?
Generally, if you are negotiating a clause for new technology parity – whether it happens as part of your initial contract arrangement or later down the road – then it’s going to be centered around a broad principle of getting access to the same products and services as your host’s customers.
Parity is about timing and creating a level playing field for services available in the market. But it doesn’t mean you will be able to offer the same pricing, however. There is still a commercial discussion to be had about wholesale costs.
At that point, MVNOs need to make decisions based on the wholesale cost on offer, such as whether they can create a proposition that gives added value to their customer, what the value is worth to consumers, and therefore what they will pay for it, and how it will translate into margin.
So in short, whilst it might seem that MVNOs with parity are in a strong position, they will still need to enter a price negotiation.
The big learning is to think long term
If there’s anything to learn, it’s that you need to have an eye on the future when you are building wholesale contracts. Typically, your contract term will be five years, and with the ever-increasing pace of development in the mobile market, that is going to feel like a lifetime without adequate protections to keep you relevant to your customers.
It doesn’t matter if it’s for new products, changes in market pricing or shifts in customer behaviour, the principle still applies. And, if you don’t observe this advice, you have little chance of staying ahead of the competition or relevant in your market.
If you want some advice on negotiation, proposition development or market analysis then get in touch with me or come to our free masterclasses at MVNOs World in Amsterdam.
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