Onfone the inside story

Through the years a lot has been said and written about MVNOs – especially the MVNOs that have been dominating the Danish mobile market. For the past 10 years, Denmark has continually been one of the mobile markets where innovative new MVNOs have attracted the most attention globally.

10 years ago it was the two Web-based discount no frill MVNOs Telmore and CBB that people were talking about. These two MVNOs managed to reduce Danish mobile prices by 56% in just six months and were the direct reason why Orange had no choice but to abandon the Danish market.

Once again Denmark is out in front and leading the way, with a new Danish MVNO now doing what many companies on the MVNO market have been dreaming about for many years. Our new report “Onfone the inside story” describes in detail how a small team of innovative people in just a few months, changed a small and not particularly successful IP telephony provider into a very successful mobile MVNO.

 “Onfone the inside story” describes how Onfone with an SAC of €40 is attracting an enormous amount of customers with a monthly ARPU of 23 Euro and very low churn. While many other MVNOs are primarily focusing on prepaid customers, Onfone has created a concept that attracts hybrid customers with a high ARPU from both voice, SMS and especially data traffic.

The Onfone story is also the story about the new MVNO that in just eight months cost the jobs of 10 top Danish directors in the mobile industry, including a CEO, a COO and a CMO. Onfone has managed to create larger changes on the Danish mobile market than the changes that Telmore, CBB and all the other no-frill MVNOs around the world have been responsible for during the past 10 years!

The details about Onfone’s success

Once Onfone had discovered the correct product mix, everything started moving very quickly. In just eight months, Onfone handled around 20,000 high consuming netadds a month. On a market with a population of just 5.5 million people and which has 4 mobile operators and over 40 brands fighting to attract the attention of the Danish mobile consumers, 20,000 high consuming customers is a great deal – especially considering that Onfone only has 50 employees and only uses one distribution channel; their website.

In our new report “Onfone the inside story” we describe in detail how Onfone’s business developed month by month. We have analysed their business strategy, how competitors on the market reacted and how the launch of Onfone influenced the Danish mobile market in the short, medium and longer term.

If you are an MVNO, MVNE or a mobile operator that understands the value of having an aggressive MVNO strategy, our report “Onfone the inside story” will show how you can develop the MVNO market to increasingly attract customers that mobile operators classify as their most valuable customers. In other words, smartphone customers with an attractive mobile consumption.

There is no doubt that Onfone’s pricing is aggressive. On the other hand the wholesale prices they had negotiated with their hosting mobile operator were identical to those given to other MVNOs. The only difference was the way Onfone was bundling and marketing their products.
In fact there are surprisingly many similarities between what Telmore and CBB achieved 10 years ago and what Onfone now has achieved – and even the outcome is the same. The only real difference is that 10 years ago it took three years for the MVNOs to achieve their success, while Onfone only needed around 6-8 months.

Onfone cost the Danish operators a potential revenue loss of around 2 billion DKK on a total Danish market of 17 billion DKK. During the first 6 months after Onfone’s launch, the Danish operators reacted by firing top directors one after the other, resulting in 10 top Danish directors losing their jobs in just half a year. Not surprisingly they were replaced by new bosses that had experience from the discount MVNO market.

If you would like to learn more about this very interesting Onfone business case, how they created their business strategy and the impact that Onfone has had on the Danish mobile market including how some operators adapted and took advantage of Onfone as an active part of their strategy, please do not hesitate to contact us for more information about our report “Onfone the inside story”. This new report clearly describes how operators can use an aggressive MVNO strategy to achieve competitive advantages on their market and thereby benefit both themselves, their customers and not least their shareholders.

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