Research Notes

How mobile operators can preserve control in a changing market

MNOs across Western Europe have seen discount MVNOs spreading like the plaugue, causing voice and SMS prices to fall dramatically. The MNOs have been forced to change the way they operate in these tough new market conditions.
But some fears about discount mobile telephony are based on wrong assumptions. In fact, the discount players have brought about a new environment which, if exploited skillfully, could actually be advantageous to MNOs.
Discount mobile telephony can be thought of as a passing phase that has replaced the traditional “one size fits all” MNO approach. It saw a number of segmented virtual mobile providers appearing, with discount providers being one segment aimed specifically at price-conscious consumers.
History has shown that having wholesale customers on your network can be a risky strategy. Several MNOs have experienced large losses in their share of network traffic when an MVNO has decided to switch to another network.
For MNOs, therefore, it’s vital to find ways of locking the mobile provider to their own network so that this does not happen.
Besides offering mobile providers access to standard facilities such as voice, an MNO could offer specific platforms and technologies, including portals, Service Delivery Platforms (SDP’s), location platforms and IM platforms.
Offering such platforms and technologies as ‘white label’ products, MNOs can not only make it easier to become a mobile provider on its network, but also raise the barrier to switching to another MNO.
If a mobile provider without its own network has access to a number of the MNO’s own platforms, it would be forced to use different platforms if it switches to another network host. This could be very inconvenient for the mobile providers’ end users. In other words, switching to another MNO would not go unnoticed by the provider’s end users.
The more MNO platforms the mobile provider uses, the more difficult it would be for them to switch to another MNO. MNOs can thus develop a strategy of developing, purchasing and licensing attractive platforms for their wholesale customers, in order to attract and retain them.
By licensing and implementing an MVNE platform, the wholesale customer is more locked down onto the network, which in turn gives the MNO more control of the market.
These challenges, and more, are highlighted in our new reports, How to Succeed in the Second-Generation MVNO Market and How Mobile operators get success with their MVNO strategy, which analyses the major changes taking place in mobile markets and helps mobile players of all types develop their strategies for future success.

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