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Retail MVNO, MVNO, bill shock, mvno strategy

Six reasons why MVNOs need to go digital

05 May 2017

Talk to anyone in technology in a large organisation and they’re bound to tell you how they’re in the middle of their latest digital transformation initiative. Practically everyone’s on a “digital journey”. Yet most of these companies have war-stories to tell about IT projects. And MVNOs ought to be particularly suspicious – as the whole purpose of an MVNO is to leverage someone else’s technology; namely a carrier. So what’s changed?

We think the world has changed forever for MVNOs, making a digital infrastructure - on your own terms rather than a carrier’s - non-negotiable. Here are six reasons why.

  1. Customers have expectations

Changing technologiesThere was a time when customers took the technologies they were given. IT moved slowly enough that an MVNO could deploy new ideas along with their carriers and capitalise on them to establish market share. But the stratospheric rate of development in technology has put paid to all that. Don’t believe us? Well, 1G (analogue cellular) was first deployed by NTT in 1979. It was 1991 before 2G appeared and 2001 for 3G. We only had to wait until 2009 for 4G. It’s a basic example of the rapid development of technologies – and that’s before we look at the incredible evolution of devices themselves: it’s only a decade ago that the very first iPhone was launched.

Today, the customer is in charge. They take technology experiences from their work and home lives and apply those expectations to their mobile experience. And especially in an online world which gives them access to immediate and useful information, they expect insight, service and functionality on demand. They expect plans and contracts which are customisable around their needs. If Facebook and eBay can give them instant and current information and a personalised experience, why should their mobile carrier be restricted to monthly billing cycles and off-the-shelf plans? Today’s customer values immediacy and control – and only an end-to-end digital service provider can give it to them.

  1. Customers have choice, too: bill shock just won’t do

Similarly, there was a time when carriers (either through choice or technical weakness) routinely gave their customers bill shock. Restrictions on account plans, inflexible availability of top-ups and paper-based or delayed account information meant that consumers were used to the occasional nasty surprise on their bills. Complex roaming arrangements meant that, every few months, the press dined out on apocryphal tales of travelling families returning to a £1500 bill because little Jimmy watched the entire Harry Potter canon on 4G.

But again, customer expectations have moved on and rendered that shock a cost to the business – it just makes the company look incompetent or money-grabbing. On iD Mobile’s digital platform, for example, customers can see their balance and buy top-ups in real-time. They can see their entitlements to voice, text and data in the on-board app and receive push notifications long before any unpleasant charges kick in, so there’s never a nasty surprise. In a saturated market, unless you can offer the same insight, customers have plenty of other brands to choose from.

  1. Design your product roadmap around customer demand

New products

Tying your product roadmap to a carrier’s development schedule is rather like grabbing a tiger by the tail: you’re going to go where it wants to go. As we’ve seen, customer expectations are changing fast, and with a digital platform, you can design services that meet their needs: whether that’s integrating OTT services, designing new products to meet market segments or innovating on price points. Traditional carriers are not only incentivised to put your needs to the back of the queue, they are also likely to be contending with their own legacy architectures which will slow down progress.

  1. Digital unlocks marketing that delights

MVNOs exist to target market segments. Retail MVNOs (e.g. Asda Mobile) gain their customer stream from a store brand – and should in turn deliver added value to the store as a new marketing channel. Migrant MVNOs (e.g. Lebara) offer attractive call plans to specific countries. They succeed by being able to market effectively to their communities, and digital operations generate enough data for marketing to become sufficiently personalised that it becomes a pleasure to the customer rather than an irritation.

When you know, in real-time, that a customer is in or near a store, you can present them with ideal special offers. When you can assess a customer’s international call patterns, you can give them new and appropriate deals. One major European retailer recently discovered that their mobile subscriber-shoppers spent 20% more in their baskets (both online and offline): the value of marketing in the mobile channel is indisputable, digital maximises the potential of big data to make marketing personal.

  1. Be tomorrow ready

Predicting the future is a fool’s errand in most businesses. In mobile you can get the whirly bow-tie and squirty flower out, because only a clown would try. Trends on the agenda just for 2017 are (deep breath):

  • The race to 5G
  • The Internet of Things (IoT) and device control
  • Bots, virtual assistants and artificial intelligence
  • OTT services, especially in on-demand media
  • Consumer security
  • Powerful mobile marketing

Crystal Ball.jpgAll of these have legitimate customer expectations, but putting them in order of customer need or demand would be foolish. On a digital platform, you’re tomorrow-ready. On IoT, for example, Analyst Ovum (1) reports: “Telcos need to invest in agile IT systems before they can monetize IoT. Specifically, telcos must invest in highly scalable billing systems [and] advanced analytics solutions”, tools which use rules and data to convert service usage into metrics that the customer can understand and use. A digital analytics and billing platform is agile enough to support your decisions and commercialise them.

  1. Less boo-hoo, more BAU

With a digital platform, you’re in charge of your customer experience, and that means fewer calls and fewer angry customers. With app functionalities supporting self-serve use cases, more requirements can be met immediately, day or night, without the intervention of a customer service assistant. That cuts call centre costs. And when customers do contact you, visibility of real-time customer activity and history, along with synced usage, billing and customer databases, means it’s easy to trace problems and reach a rapid resolution. All in all, more actions fall into Business As Usual, fewer into the expensive exceptions which require complex forensic assessment and decision-making.

View our VNOnDemand Brochure to discover how you can realise your digital ambitions.

(1) ‘Developing a Strategy for Telcos to Monetize IoT', Ovum, https://www.ovum.com/research/developing-a-strategy-for-telcos-to-monetize-iot/