Research Notes

MVNO for kids – WiGOMO is targeting the 5 to 8 years old children segment.

There is no doubt that the MVNO market is very dynamic and that the number of MVNOs is exploding in many countries. It is also no secret that there is a market for discount/No frill MVNOs, ethnic MVNOs and MVNOs that originate from supermarket chains – at the end of the day these types of MVNOs are simple and straightforward to launch.

What is exciting to follow are the many ventures being started by different MVNOs that are focusing on various niche segments. The mobile market can of course be divided into many different segments and the question is how to target these segments and how a MVNO can ensure that they are creating a profitable business.

In Denmark, Race Telecom A/S has launched a MVNO that is targeting kids from the age of 5 to 10, with their primary focus on children in the 5 to 8 year age group. This segment contains approximately 7% of the total population and is therefore a very narrow segment. On the other hand this is a very large segment if viewed in a global perspective.

If you take a closer look at this segment, it is obvious that neither operators nor handset manufacturers are taking the child segment very seriously and that the products and solutions available for this segment are very limited – and on some markets non existent.

The solution that WiGOMO is offering their customers is a combination of a mobile phone – WiGOMO One -with built-in GPS, and an online solution where parents can define the rules for where and when the childs’s phone can be used.

In practice parents can access a website and define the rules for who can call and SMS the child and who the child can call and SMS. Rules can also be defined for when the phone can be used and parents can access statistics on how and when the phone has been used.

Basically, WiGOMO is a concept developed for parents that want to gently introduce their children to mobile telephony in a safe way, while simultaneously having the possibility of protecting their children. By using WiGOMO, parents have the possibility to monitor how their child is using the mobile phone and additionally have the possibility of using the built-in GPS and integration with Google Maps to check the child’s location.

The big question is whether there is a business case for a market player like WiGOMO – and in reality the answer is most definitely no. This is why WiGOMO’s business case is not built on a traditional MVNO’s business model. They have chosen to enter into a partnership with a MVNE that handles all the practical issues, allowing WiGOMO to focus on developing the technical solution and marketing and selling the product to end-users.

A niche player like WiGOMO can operate with only two employees and a partnership built on a business model that ensures that most of their costs are related to the number of customers and the ARPU generated by those customers.

WiGOMO has chosen to target the global mobile market, by offering their technological platform to operators, MVNOs and MVNEs, that then can market and sell this solution in a localised version.

If you would like to know more about WiGOMO you can find much more information about their concept in the report How to Succeed in the Second-Generation MVNO Market how they have structured their business and how a niche MVNO can create a sustainable business by using MVNEs and an optimal business model.

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