Innovation the byword among MVNOs

Metaratings
01 Nov 2016
00:00
Article

It is easy to get bored and cynical when you are a hardened conference goer, but there was a definite buzz in the air at the 6th Annual MVNOs conference in Singapore earlier this month.

After sitting through an interesting diversity of case studies of MVNOs spanning Australia, Japan, Singapore and Malaysia the prevailing impression was one that the MVNO space is one which is spearheading innovation, and presents as something of a saviour not just for MVNOs themselves but also the MNOs they rely upon.

If there were two conference themes, one would have been the diversity of the case studies presented and the second would be that collaboration is the byword for the relationship between MNOs and MVNOs.

There is an essential interdependence between them which needs to be developed much more deeply.

First, the case studies.

We heard from RedONE in Malaysia, which has an evolving strategy of firstly targeting female users, across female dominated professions such as teaching.

Sales and distribution is handled by a network of small business people who are also investors in the brand, so it’s a two way street with the company.

Most interesting though were the plans to evolve. Leveraging credit card branding and a voucher system, RedONE is heading towards being as much a mobile phone provider as a fintech, creating a community of users who can be targeted with offers from retailers, with the company taking a clip on the way through.

It is a very different approach from Singapore’s Circles.Life, which I’ve written about previously. Here is a lifestyle based provider targeted the digital generation who want everything – from cinema tickets to transport – delivered through their phone.

Unlike RedONE, which would seem to be very Malaysia focused, the Circles.Life model is a portable one, and could soon find its way to other South-East Asian markets.

In Australia, Woolworths is the country’s largest supermarket chain, and is leveraging its brand in communications as it is simultaneously rolling it out in financial services, notably insurance.

The idea with Woolworths Mobile, the conference was told, was to “make buying a phone and plan as easy as grocery shopping.”

Ultimately, the message is that in a communications landscape where voice is no longer so dominant, the MVNO model can enable a diversity of business cases and uses.

For MNOs, particularly those in competitive markets, partnering with MVNOs is a way of penetrating niche markets outside of the core offering.

Most importantly it is a way of leveraging the significant capital investment on infrastructure and network and getting a better return.

This is particularly the case for MNOs which are not the leaders in their markets. If they are ranked third in a market with three MNOs, then using MVNO partnerships to ramp up the utilization of their network is a good way to growth.

The early MVNO example was Virgin Mobile. In several global markets challenger MNOs partnered with Virgin and hitched a ride on the brand’s cache to drive growth.

The Virgin model, as the Singapore conference showed, is a little out-dated but the basic idea of brand leverage remains.

Combine that with some of the innovative approaches we are seeing in Asia, and the MVNO sector promises to be one of the most active in interesting to watch in the near and medium term futures.

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