Mobile Business Virtually brilliant

The world of MVNOs is growing, with 2012 seeing the growth of many of these businesses plus MVNAs growing in strength, despite or perhaps because of the current tough market conditions. Here, Heather McLean asks where this market is right now, where it’s going, what value MVNOs add to the mobile market and if services have a role to play in the future of these businesses.

he UK MVNO market is going from strength operator has launched MVNO services outside of Tto strength this year. According to Jason China. We also announced a strategic partnership Bellman, director of MVNOs at EE, the market is with MVNA Atmovia to support us when dealing starting to look up and that is increasing interest with large customer bases, with an out of the in the launch of new businesses. He explains: box capacity to manage up to seven million “The market is the most active we’ve seen in subscribers,” notes Bellman. the last two years and we’re witnessing lots of “Customers’ needs are also becoming interest in our network, so it’s a really exciting more sophisticated so we’re evolving the way time. As businesses are feeling more certain we support our MVNO partners to advise on about the economic outlook, there is renewed everything from infrastructure and architecture to interest in launching a new brand in the market. propositions and innovative services like mobile “Established brands that already have a large commerce,” he adds. customer base, a well known brand and a strong retail footprint see mobile as an opportunity to Huge growth grow their existing business,” continues Bellman. While Nick Parbutt, head of wholesale at “This interest is coming from a number of brands , comments: “We are seeing that MVNO across consumer and B2B sectors, which we shares of retail revenues continues to increase haven’t seen in the past two years, as well as in the UK market, with this growth driven by interest through our aggregators.” some very large players continuing to develop For example, Bellman adds that EE worked and mature as mobile operators, such as with its MVNA, Transatel, earlier this year to , , Talk Mobile and Virgin. There are launch China Telecom as an MVNO. “The deal newer players gaining traction as well, such as Nick Parbutt, head of marked the first time that a Chinese telecom TalkTalk.” wholesale at Vodafone An example of brands hitting the MVNO scene own special blend of products and differentiated Transatel on MVNOs and MVNAs include the many working services through the exploitation of their own Mobile virtual network operators (MVNOs) have existed in with EE, which currently intelligent network infrastructure. MVNOs do this the UK for over ten years now. There has been a trend moving has the following MVNO to enable them to offer innovative promotions from a few large MVNOs, such as Virgin, Tesco and BT, to a partners: Virgin; Hutchison and services to their customer base, commonly more distributed model using the aggregator or mobile virtual 3(UK); ; Ikea; an ethnic or special interest group. This avoids network aggregator (MVNA) approach (which is what Transatel Vectone; Nowmobile; Matrix; them having to compete with the mobile network is,) as the opportunities became smaller. Econet; ; Cable operators on price.” Initially mobile network operators liked to maintain as and Wireless; i-Pass; Talk Talk The increase in MVNOs is increasing the much control as possible, contracting for MVNOs only with Business; and Intercity. In rise of the MVNA, comments Ballard. MVNAs the large players who could commit to significant volumes. addition the following MVNOs aggregate demand from smaller MVNOs and As the opportunities shrank, mobile network operators looked are on Everything Everywhere’s purchase mobile airtime in bulk from a partner for alternative delivery mechanisms to address the market network through Transatel: mobile network operator, such as Vodafone in the demand; this led to the MVNAs. China Telecom (Europe); Axis case of Cognatel. “MVNAs provide the underlying An MVNA is a service company that buys mobile airtime Telecom; Unicom; Priyo; The systems, platform and value added services to from the mobile network operators and adds its own technical Phone Co-Op; Shebang; Apollo; multiple MVNOs, with the aim of reducing the services and sells an integrated mobile service package to Zamir Telecom; Team SIM; and overall operational cost,” comments Ballard. MVNOs. They meet the needs of the mobile network operators . MVNAs are continuing to provide value to this by providing a more flexible technical infrastructure than the And the reason for this growing market, states Parbutt: “MVNAs provide network operators could ever achieve. This enables them MVNO growth, Nick Ballard, an important role in the market by enabling to bring new and smaller MVNOs into the market, which an director of mobile, Geo smaller MVNOs to join the market. Those MVNAs operator would not be able to service properly themselves. Networks, states, is simply the that we see as being successful are those that They meet the needs of MVNOs by reducing set up costs great business plan the model are selective about the MVNOs that they enable and time to market. They also provide the technical knowhow, creates: “MNVOs will commonly and subsequently work with to develop long term leaving the mobile network operators to focus on proposition treat the host mobile network partnerships. We also believe a close working development and sales and marketing activities. operator’s infrastructure as a relationship with the host mobile network means to an end, offering its operator is a prerequisite for success.” Mobile Business

Viacloud’s Atmovia platform offers “Those MVNAs that we see as MVNOs greater control being successful are those that In August, EE announced a strategic partnership with MVNA Atmovia, the UK wholesale subsidiary of the Viacloud are selective about the MVNOs Group. Atmovia invested in deep end to end technology from that they enable and subsequently Nokia Siemens Networks to enable the platform to support work with to develop long term the launch and growth of MVNOs on the EE network. Atmovia has the unique capability among MVNAs of dealing with large partnerships.” Parbutt customer bases, with an out of the box capacity to manage up to seven million subscribers. MVNOs also add a lot of value to the mobile Help or hinder The state of the art embedded technology also allows market, states Bellman. He comments: “First and On what is going to MVNO customers to benefit from a highly agile and user foremost it means increased competition and influence and help or hinder friendly platform. Where previously it might have taken many therefore more choice for the consumer. We have the growth of the MVNO and weeks for an MVNO to create and roll out a new tariff, with the invested millions in the EE network to ensure MVNA markets over the next Atmovia platform it can take just ten minutes through a self end users receive the best possible service 12 months, Parbutt comments service, branded portal. and whether it’s directly through our brands or that there are two major effects Ahmed Alumran, managing director of the Viacloud Group, through our MNVO partners, we’re helping to that Vodafone believes will said: “We have made a significant investment in the Atmovia support the wide range of needs for consumers drive the MVNO market over platform and our relationship with Everything Everywhere, and enterprises across the UK.” the next 12 months. “These because we believe there is a very real market opportunity are the growth in smartphones in providing this level of infrastructure and functionality to and data, coupled with the MVNOs in the UK and across Europe. Our aim is to enable Juice offers complete control consumer’s desire for value in our MVNO partners to achieve their growth and profitability Juice mobile, an MVNO utilising the a flat economy,” he explains. objectives with the knowledge that they are backed up by Vodafone network, provides channel partners “Those MVNOs that can meet both the UK’s largest mobile network, and the most advanced complete customer ownership, as well as this need through competitive mobile platform available.” control over price and branding, providing the contract offers, or pay as you Richard Williams, chief operating officer at Atmovia, said: ability for channel partners to build real asset go bundles that mirror contract “We don’t believe that anyone else has done what we have; value into their business. offers, will be those that have investing in the highest-spec, carrier grade technology for Gavin Raines commented “Owning a greatest successes in this our platform, and taking the time to fully integrate it with customer contract is an asset that businesses market. our mobile network operator partner. Our MVNO customers thrive on, nurturing and protecting them “Over the next 12 months will benefit from this investment directly, as they are able from the outside scary lure of the world of MVNAs will benefit from the to quickly react to changing market conditions and offer competitors is something which one may growing number of businesses their own customers the flexible and high quality service take for granted………or maybe not. In the that are seeking to use mobile they expect, on a network that, like us, is investing great wonderful world of mobile, filled with platinum to stimulate their revenue amounts of time and money to provide the best service for its partners and centres of excellence these growth and create value in a customers.” business don’t get the same level of freedom.” depressed economy,” Parbutt When you compare the market the continues. “The challenge for key differentiator to Juice telecoms MVNO MVNAs will be to secure new partners that have proposition it quite simply highlights the the potential to create sustainable businesses in removal of risk. With no targets, no pricing niche markets.” criteria restrictions or barriers of sale imposed Bellman says the UK has the most aggressive unlike some of the major mobile networks and mobile market in Europe: “Competition is unbelievably no set-up fees also. increasing all the time and customer needs and Their proposition is one of agility, and expectations are higher than ever before. This without restriction in the market place, means that businesses launching mobile services empowering their partners with confidence need to have very clearly defined propositions, and ability to manoeuvre into market spaces strong channels to market and of course the outside of their usual, whether that space is required funds for growth. The ability of MVNOs SME, Corporate or Enterprise. to overcome challenges during the rollout and the Gavin Raines continued “All in all Juice strength of the management team are also crucial Telecoms provide a fresh commercial to success. approach to fulfil channel partners customers “In order to navigate the launch of a new and new opportunity needs and requirements mobile service, the network-MVNO relationship including the low ARPU needs, which, let’s must be one where both sides are prepared to face it, major networks tend to glance put in the time needed to consult on all aspects sideways at or push to the back of the queue of a new service, rather than just a traditional for a lengthy commercial signoff process. “ supplier, buy-sell relationship,” he says. Continued on page 44 Jason Bellman, director of MVNOs at EE

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Challenges for all enterprises and sell their service. We support While Bellman says that MVNOs often our MVNOs from conception and design, to underestimate the technological challenge integration, to launch, to ensure they have the and the complexity in integrating the number best possible chance of success.” of partners that are required to launch a new Ballard comments on another MVNO service. He adds: “MVNOs also must ensure challenge: “The customers of successful MVNOs that they put the right level of thought into how should not be able to distinguish them from they get their proposition to market. Whether mobile network operators when it comes to it’s through retail, online, telesales, indirect service and performance. They will, however, or direct mail – or a combination of multiple see benefits in terms of value and the sense of channels – MVNOs must properly consider how community. MVNOs are primarily mainstream they will ultimately engage with consumers and brands with a visible market presence and marketing influence. A good example is , a Gamma wins MVNO award UK-based MVNO that uses Gamma, the next generation full network operator and one its market recognition and of the UK’s largest providers of telecoms services and related presence on the high street Nick Ballard, director of applications, won the ‘Mobile Virtual Network Operator’ to position itself as a telco for mobile, Geo Networks (MVNO) award at Comms Business Awards 2012 held at the selling directly to its customer Royal Lancaster Hotel in June. base.” deliver on our current 4G roll out plans for EE Rob Davis, head of mobile at Gamma said: “I’d like to say Keeping an MVNO alive customers, covering 16 cities by the end of the a big thank you to the 83 resellers that have signed up as is a challenge, as is keeping year and 98% of the UK population by 2014. In MVNO’s with Gamma and who are making a success of the any business going, states parallel we are working to understand how and service. We’re the only mobile service in the UK that enables Parbutt. He comments: “Doing when we can support at a wholesale level so that channel partners to become an MVNO for UK businesses with a deal with a network and the as many consumers and enterprises have access a converged fixed and mobile offering, and this is where we initial launch is the easiest to 4G as possible.” are seeing partner’s really winning business. Our entry into part of running an MVNO. While Parbutt continues: “In addition to areas the mobile market has been marked with this award and Gaining traction in the market such as 4G, we would expect to see innovative we’re pleased to have received such a great accolade for a and growing the MVNO to a commercial models to emerge as non-traditional relatively new service.” sustainable level is the key MVNOs come to market with unique propositions Steve Tipper, sales manager at Pennine Telecom, challenge. such as Amazon with the Kindle and TomTom with commented: “We’re really impressed by the level of support “Vodafone’s view is that their Live traffic services.” that Gamma is providing us and so it comes as no surprise this is where the mobile One example of a different kind of business that they have won this prestigious MVNO award. Working network operator can provide potentially entering the MVNO market is with Gamma Mobile allows us to compete effectively, greatest value to the partner Facebook, which has recently stirred up interest differentiate our capability, and build real value into our in supporting them through as it toys with the idea of moving heavily into businesses.” the first few years following mobile. The firm is already the focus of many launch. We have found that mobile phones on the market that even include getting involved when things Facebook buttons. However, Strand Consult get difficult only strengthens the states that Facebook has a greater opportunity for partnership,” Parbutt says. monetisation if its business beyond advertising, and that is in the mobile communication industry. 4G influence? Strand Consult says that an MVNO is a logical 4G services do have a role to step for Facebook, particularly since its IPO play in the future of MVNOs that has placed it under increased pressure to and MVNAs, particularly in push revenues. The research firm commented: expanding the potential types of “Adding mobile voice and data to this mix would business entering this market. not a stretch. Not only does Facebook launch Parbutt explains: “The internet new products all the time, but the ability to be an is going mobile and consumers MNVO can be completely outsourced to a mobile want access to it wherever they operator. Without a doubt, Facebook has the are. MVNOs need to address this world’s largest distribution platform and potential need utilising the high speed customer base to market its MNVO offering.” networks being delivered by the Concluding, Bellman comments: “We’re network operators, including 4G. continuing to see the market evolve, both As with voice and text, the more organically and through new sectors. Without successful MVNOs will be those question there is more activity and interest from that can meet the needs of their mass market and B2B brands than we’ve seen consumers in a unique way.” in the last two years, which is a clear sign of 4G may be a feature of growth.” MVNOs in the future, but for now the first company with mobile 4G in the UK, EE is Rob Davis, head of concentrating on rolling out mobile at Gamma services to consumers across the UK. Bellman comments: “Our focus at launch is to