Unlocking opportunities: The rise of MVNOs in a changing telecommunications landscape

Unlocking opportunities: The rise of MVNOs in a changing telecommunications landscape

Kelvin Chaffer, CEO of Lifecycle Software, discusses the burgeoning role of Mobile Virtual Network Operators (MVNOs) in transforming the mobile services landscape, emphasising the unprecedented opportunities for brands to strengthen customer relationships and expand their revenue avenues.

Kelvin Chaffer, CEO of Lifecycle Software

Mobile services – voice and data – are no longer solely the domain of big-name, high-street mobile operators. Mobile Virtual Network Operators (MVNOs), once viewed as very niche or low-budget options, are becoming far more mainstream – and more straightforward to set up.

This offers brands outside the traditional mobile operator space a new and exciting opportunity to extend and deepen the connection with their audience and diversify revenue streams.

We’re currently seeing this with financial service brands such as Revolut with their recent eSIM launch to provide customers with roaming services. Supermarket and high street brands have been cashing in on the opportunity for a while, with notable UK examples including Tesco, Asda Mobile and Superdrug. And it’s not just brands – celebrity and influencer-backed launches offer a new opportunity to build direct relationships with fans and customers in a way that delivers far greater revenue potential than other, more traditional vehicles.

The MVNO success stories are numerous. Ryan Reynolds, with an estimated 25% stake in Mint Mobile, has converted three million customers to the service through his involvement, for instance. 

However, a straightforward path to launch has not always been the case. Historically, the route to becoming an MVNO was fraught with difficulty, including extensive regulatory requirements, prohibitive upfront investments and intricate host network legacy systems that complicated setups. Moreover, with established operators representing the de facto choice regarding mobile contracts, significant investment was required to create awareness and convince customers to switch.

A changing landscape

The landscape is changing, however. This is, in part, due to consumer behaviour. The cost of living has forced a radical rethink of monthly outgoings, and more flexible, cheaper mobile contracts certainly offer a more attractive proposition in the current economic climate. More durable handsets that make reliance on regular upgrades as part of longer-term contracts less important are helping to create the case.

As established mobile network operators (MNO) increasingly lose out in the ‘race to the bottom’ with their long contracts and high prices and are increasingly seen as ‘premium’ by consumers, they seek ways to monetise their costly network investments. Allowing MVNOs to purchase spare network capacity wholesale is one way of doing this, and it is therefore in MNO’s interests to minimise the barriers to entry for new MVNOs.

These two fronts of changing consumer and MNO behaviour collide, creating the perfect storm for MVNOs to launch. But there are other changes unfolding that stand to make the journey even smoother.

e-SIM technology, for instance, is a game-changer for MVNOs. As the physical SIM card gives way to a more agile, digital counterpart, logistical complexities relating to physical SIM provision give way to a more refined model that enables MVNOs to overcome legacy challenges with a minimal cost footprint. This is particularly key for digital brands without a physical footprint, allowing digital-only MVNOs to launch in far shorter timescales and operate at a fraction of historical costs. Moreover, the ability to switch providers seamlessly without the hassle of exchanging physical SIM cards boosts customer satisfaction and engagement.

Improved wholesale rates and turnkey white-label solutions have also facilitated agile market entry, combining speed with cost-efficiency. Regulatory bodies around the world are also increasingly aligning policies to nurture MVNO growth and end the monopolies of big-name MNOs, simplifying legal and procedural priorities critical for new MVNOs.

Equipping brands for mobile success

Strategic targeting and forward-thinking customer experiences are critical to MVNO’s success. Brands with established distribution networks can quickly pivot their services to engage with distinct customer segments, enabling personalised service offerings that resonate with target consumer needs and build on established brand loyalty.

New MVNO brands must take care to understand their market’s nuances and define the USP of their offering. Both instances require in-depth customer insights to tailor services and marketing strategies and make the mobile brand more attractive to their chosen demographic than generalist telecom operators. By focusing on operational strengths and utilising data analytics to refine offerings, brands can continually adapt to the ever-changing consumer demands and technological landscapes.

Choosing Business Support System (BSS) platforms that can support scalable, efficient and customer-centric operations is crucial. These platforms must offer the flexibility to tailor features according to MVNO needs and integrate smoothly with external systems. Key features such as real-time billing and robust analytics empower accurate invoicing and data-driven decision-making. With the added benefits of real-time network monitoring for optimal service delivery, robust fraud detection mechanisms and seamless process automation, a modern BSS helps position any MVNO for success in a competitive telecom landscape.

Capitalising on a neglected B2B market

While the B2C sector has traditionally been the MVNO’s home, their ability to capitalise on data processing technologies makes them a natural choice for the B2B sector, too. Naturally data-heavy, the B2B sector is crying out for the high-value propositions offered by MVNOs to better serve customers looking for faultless connectivity and expert customisation, all at better pricing, as the same cost-of-living issues hit businesses as well as consumers. By becoming a trusted partner to the B2B sector, MVNOs can not only start to dominate the B2C sector but also take control of a hugely scalable opportunity within the B2B sector.

As we’ve seen from the Revolut example, one sector that is ripe for MVNO pickings is financial services. Mobile banking and payments growth has provided multiple opportunities for MVNOs to create partnerships that will facilitate the processing of the resulting data effectively and cost-efficiently. Other business development areas worth exploring include IoT (the GSMA forecasts IoT connections to reach more than 38 billion by 2030, with the enterprise segment accounting for more than 60% of the total) and private networks, with MVNOs creating services informed by specific customer needs.

Ready to take the market by storm

The rise of MVNOs represents a significant shift in the telecommunications landscape. As they emerge as mainstream players in mobile services, brands outside the traditional mobile operator sphere are presented with an enticing opportunity to deepen connections with their audience and diversify revenue streams.

Advances such as e-SIM technology and improved wholesale rates have made the path to launch easier while changing consumer behaviours and evolving MNO strategies have further fueled their growth. Equipped with strategic targeting, innovative and personalised customer experiences, and modern BSS platforms, MVNOs are well-positioned to succeed in the B2C market and tap into the vast potential of the B2B sector. As industries continue to evolve and embrace digital transformation, MVNOs stand ready to capitalise on new opportunities, from mobile banking to IoT, shaping the future of connectivity.

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