Opinion
The MVNO in the 5G era: The opportunities to be seized
The Ericsson Mobility Report states that 5G mobile subscriptions will exceed half a billion by the end of 2021 — making 5G the fastest adopted mobile generation in history. The 4G rollout taught mobile virtual network operators (MVNOs) that they must take a more proactive approach if they are to successfully compete with larger mobile network operators (MNOs). Here, Hamish White, CEO of telecommunications software provider Mobilise, explores the 5G future of the MVNO.
When 4G became widely available, for several reasons, MNOs were slow to share it with MVNOs not least being the desire to keep those high spending data customers all to themselves for as long as possible. More than a decade later, the development of the MVNO market and evolution of consumer demands means that MVNOs need to find ways of increasing their own competitive advantage, to prevent being left behind.
The delay in 4G availability from MNOs to MVNOs caused countless problems. For example, Spanish MVNO MovilDia had to make a costly and disruptive host provider switch from Orange to Vodaphone Spain to be able to offer its customers 4G back in 2018. Experience tells us that a host migration can result in between five and 20 percent customer churn, high costs in a competitive industry such as telecoms and even more so in the MVNO space where margins can be razor thin.
As consumer demand for greater reliability and data speed rises, the pressure mounts on MVNOs to provide the same 5G services as the MNO’s themselves and raises the question, how can MVNOs compete in the 5G era?
Stand out from the crowd
It’s been predicted for some time now that 5G will be the catalyst for the rise of specialized MVNOs and at the MVNOs World Congress 2020, this trend was reinforced by the industry — growth potential lies in enterprise 5G, not just consumer 5G. This has led to the recognition that to differentiate themselves from the competition, MVNOs should consider specializing in business to business (B2B) use cases.
These 5G use cases rely less on Enhanced Mobile Broadband (eMBB) and more on Ultra-Reliable and Low Latency Communications (URLLC) and massive machine-type communication (mMTC) of 5G networks.
Commenting at the congress, Dario Talmesio, principal analyst and practice leader at Omdia, said becoming specialised was “a great opportunity for MVNOs since many MNOs are starting to offer multiple, niche-focused brands to serve specific segments of the market”. This move by MNO’s to target specific segments versus their traditional “one size fits all” approach works to compete against MVNO’s specialised or segmented offerings, potentially reducing some of the market opportunity for MVNO’s.
To become 5G specialised, MVNOs must delve into market trends, analyse and identify where the 5G opportunity is prominent. Such an opportunity is in the development of Smart Cities. For instance, the United Nations predicts that 68 percent of the world’s population will be living in urban areas by 2050, and IoT connectivity is going to be integral to the success of the smart cities that can efficiently manage power, transport and communications. The possibilities of 5G in smart cities was demonstrated with Romania’s first smart city, Alba Iulia, which was developed with Orange in 2018.
Take also for example, Standard Bank Mobile in South Africa, which specialises in finance and rewards its customers with one megabyte (MB) of data every time 20 South African rand is spent on a credit card.
Other areas that benefit from specialised 5G networks include healthcare and smart factories, where there is the potential for mass-adoption of the Internet of Things (IoT).
eSIMs
It is in the area of embedded Subscriber Identity Model Technology (eSIMs) that are becoming increasingly popular and necessary for both consumers and operators — which can also help MVNOs to shine. Research from the Telco Consumer Behaviour Survey by Capgemini Research Institute, found that over 40 percent of consumers would prefer to activate mobile services using eSIMs, rather than visit a store to activate a physical SIM card.
The 5G future of SIM cards lies in eSIMs, which still play the same integral role in 5G networks as previous SIM cards, but a fully integrated 5G-capable eSIM offers greater flexibility as device owners can switch carriers without having to switch SIMs, as well as reduce costs to the operators
Understandably, giving customers more control over their plan and easier access to switch providers can be off putting for Telcos who fear a loss of control over their customers, but it’s important to recognise how todays digital savvy consumers demand the convenience of digital products such as eSIMs. For telcos of all types, a digital strategy if properly understood and managed, will be reflected in enhanced revenue generation and customer retention.
Removing the need for a physical SIM card offers cost savings and greater efficiency opportunities for MVNOs, as it eliminates complex logistics processes, fulfilment charges and production costs. In addition, eSIMs are instantly onboarded into the device, making it both simpler for the customer to use and ultimately replacing the logistics of the operator with a cost efficient digital only process.
eSIMs are already being placed in a host of new cellular-enabled devices, such as wearables. Utilising 5G as it becomes ubiquitous, these devices will possess processing power that will rely on fully integrated eSIMs to manage their connection.
Helping drive this eSIM shift for MVNOs is Mobilise, which offers eSIM as a service. Mobilse makes the digital solution more user friendly by eliminating the need for a QR code, and instead uses in-app eSIM activation, which allows users to activate their eSIM profile in a simple one tap onboarding process. MVNOs can therefore offer eSIM technology, and ever increasing 5G capabilities, in a way that’s easier for customers to access.
Take a slice
Amongst these growing opportunities that will further support the era of 5G and increasing consumer expectations, MVNOs will also be able to adopt “network slicing”. Slicing allows the subdivision of one physical network into multiple networks (slices). Each ‘slice’ delivers specific network features tailored to the consumer or business segment dependent on use case.
This presents opportunities for MVNOs to tap into different segments with tailored products and regain control over resources. For example, different sectors benefit from different characteristics such as lower latency for medical and automotive sectors that require greater speed, security and resilience for data transmission, whereas logistics and smart manufacturing processes will benefit from streamlined machine to machine capability.
MVNOs must take advantage of network slicing, in order to share the opportunities that this business model offers to telcos, which is forecast to be worth $300 billion by 2025, according to The Global System for Mobile Communications Association (GSMA).
Consumer and business demands are changing and more is expected from network operators. Although MNOs often have the monopoly over spectrum via licencing and play an integral part in the adoption of new technology, MVNOs also play a key role in driving innovatation and must seize the opportunities that 5G presents. By adopting new technologies and business plans, MVNOs can continue to prove their competitive advantage, reduce MNO dependency and gain more control over the market.
Feeling the Pinch?
The rising cost of living is difficult to avoid. April 2022 saw food prices increase by 6.7 per cent, the highest petrol prices on record and inflation rise to a staggering nine per cent. As millions of customers see their mobile tariffs soar, Ross Slogrove, UK country manager at cloud calling specialist Ringover reveals his advice for avoiding the price hike.
From July 1, 2022, Virgin Media will hit its 3 million customers with a price hike of 1.5 per cent. So, if a customer signed up to, let’s say, a £30-a-month tariff after May 5, 2022, they will pay an additional 45 pence each month. EE has already increased its prices by 2.7 per cent each year — or £11.30 if you have a £35-a-month contract — while O2, Three and Vodafone are all increasing by 2.5 per cent.
Pay-as-you-go prices are also taking a hit. From July 2022, call costs with Three will jump from 10p to 35p per minute. The cost of sending a text will double, affecting the 14 per cent of Brits that use a pre-pay mobile.
Given Brits are already battling with price hikes from every angle, these costs mount up. 45 per cent of UK households have at least two mobile phones, while according to Ofcom, just two per cent don’t have one at all. And then there’s the toll on businesses, with many still relying on mobile packages to keep employees connected.
Take a Hike
When a mobile contract comes to an end, it’s common for that tariff to be rolled onto a monthly rolling contract at the same price, even though the customer has paid off their handset. Research from Which? shows that customers who allow their mobile phone contracts to roll over without enquiring about better deals could lose up to £100 a year.
Ditching a contract mid-term and without penalties isn’t possible. However, consumers should evaluate whether their minimum contract period has ended if they’re considering switching. If a customer was on a standard 24-month contract that’s rolled on after this, they’re probably over-paying and need to negotiate a better deal.
Claiming that mobile phone networks overcharged UK businesses and consumers by £7.6 million last year, BillMonitor can provide analysis into the best mobile tariffs for your needs. Money Saving Expert has an easy-to-use price comparison tool, too.
Ditch the Big Guys
Some research into mobile virtual network operators (MVNOs) may also be worthwhile. Unlike the “Big Four” mobile network operators (MNOs) in the UK, MVNOs do not own their own wireless infrastructure, so use radio networks operated by EE, O2, Three and Vodafone. They include the likes of Giffgaff,Tesco Mobile and Sky.
In Which?’s Annual Mobile Network Survey of the best perceived mobile operators, O2, EE, Vodafone and Three were outperformed by MVNOs. Three fared poorly in the customer survey, receiving the lowest rating for network reliability with customers unimpressed by its technical support.
In contrast, virtual networks Smarty and iD, which both use Three’s infrastructure, were among the highest scorers in Which?’s table with customers applauding the networks’ value for money. Three of the highest scoring carriers in Which?’s survey were Giffgaff, Tesco and Sky, which all use O2’s infrastructure.
Head to the Cloud
Shopping around and switching providers will save consumers from the Big Four’s price hikes, but what about businesses? It may be best for them to ditch traditional telephony altogether.
There are currently 4.98 million business landline numbers in use, according to Ofcom figures. However, this is expected to drop below 2 million by 2024, from a high of 8 million in 2013. With the switch off of the public switched telephone network (PSTN) imminent, businesses that rely heavily on calling should consider an internet-based alternative.
Voice over Internet Protocol, or VoIP, is often a cheaper alternative to traditional telephony. While a traditional landline phone system sends voice communications via an analogue PBX system, VoIP phone systems transmit voice calls over the internet as data packets to bring voice and data capabilities together on a single network, eliminating the need for separate lines and providers for each.
A company using a VoIP service doesn’t need to work with multiple service providers for its office, mobile, and data services, IT support is reduced and hardware and installation needs are condensed. Furthermore, because users are no longer tied down to a particular country, address or phoneline for their communications, companies can save on the cost of international charges.
With the cost of living rising, price hikes are difficult to avoid. However, consumers must check in on their current mobile contracts or they risk losing money. For businesses, it’s time to move on from the landline and onto more cost-effective, future-proofed alternatives.
About Ringover
A leader in cloud communications, Ringover seamlessly combines unlimited calling, group messaging and video conferencing into one easy-to-use app. No expertise is needed to set up and integrates with your CRM or helpdesk tools. Within a few clicks, you’ve gained access to all the data you need to enhance your call centre or sales team’s performance and boost customer engagement.
Big Tech’s entry into telecoms is shaking up the industry
2021 was a huge year for tech giants and telecoms with Google, Verizon and most recently Amazon Web Services (AWS) all announcing plans to enter the telecoms space. The convergence of Big Tech telecoms is nothing new and each company has their own plans to disrupt the current landscape for the better. But is this disruption a dream or disaster for telcos? Here, Hamish White, CEO of digital-first telecom software provider Mobilise, navigates the benefits and drawbacks of the growing tech-telecom convergence.
Despite seeming similar, in many ways telecoms and Big Tech are polar opposites. While Big Tech tends to position itself at the forefront of innovation, paving the way for new upcoming capabilities, the telecoms industry tends to stick to its traditional but stable principles and ways of working. But could a unification be just what’s needed?
Better Together
Big Tech’s entry into telecoms has a wealth of potential for service providers (SPs) and their customers. Big Tech has what many providers are lacking — the resources, financial resources and culture to accelerate the pace of innovation of the telecoms industry by applying a Big Tech approach product development and improvement. Big Tech brings its own way of innovating to the market, resulting in quicker, better products and services that smaller providers can tap into too.
This has a positive knock-on effect on consumers, who ultimately receive a better experience from their SP. Through their advance data management techniques, Big Tech has the potential to gather, organise and present more customer data from various sources. The more a SP knows about its customer, the greater the level of personalisation they can offer. A greater level of personalisation leads to more relevant marketing, great customer satisfaction and increased customer lifetime value (CLV) for the SP. A win-win for both the SP and the customer.
Personalisation is complicated to deliver, often requiring significant investment on new technology and involvement from stakeholders across the business. As a result, smaller and medium-sized providers often cannot offer personalisation services on par with Big Tech or Tier 1 SPs, leaving them uncompetitive and missing out entirely on new opportunities.
With the help of Mobilise’s HERO platform, small and medium-sized SPs can now deliver personalisation on par with industry leaders. This is because they have access to all customer data needed for such services through one central location which also houses an orchestration layer which acts as a single entry point between interconnected systems in order to capture the data required for hyperpersonalisation.
Fair Share
Despite the potential benefits that Big Tech could bring to the telecoms market, there’s also shared concerns from mobile operators all over the world. SPs’ ongoing dissatisfaction with Big Tech’s lack of investment into the physical telecommunications infrastructure has been documented publicly.
In December 2021, the Financial Times published an open letter from Europe’s 13 biggest SPs addressing tech giants to demand a greater contribution to network investment. Why is this so crucial?
Data from Sandvine’s Global Internet Phenomena Report revealed the top six tech firms are generating over 56 per cent of global network traffic. Their entire business model and profitability relies on the infrastructure funded by SPs, but despite their successes, they’re still not contributing investment that is commensurate with the gains they’ve reaped.
What’s more, telecoms’ frustration with Big Tech’s lack of infrastructural investment is without even considering the latest layer of the problem: Big Tech’s attempt to launch products and services that directly compete with SPs.
A Market Monopoly
Several tech giants are developing or already have developed telecoms business areas. There’s concern from regulators, SPs and consumers that if Big Tech’s expansion continues, they could monopolise the entire technology sphere.
From a SP’s perspective, monopolisation has already begun. AWS and Microsoft have both acquired SAS-SM accreditation, required for the cloud deployment of one of telecoms’ latest development: eSIMs. eSIMs allow SPs to onboard subscribers remotely, virtually performing the traditional functions of a physical SIM card, directly provisioning a device over the internet.
While the intentions behind AWS and Microsoft’s acquisition of this accreditation are unclear now, it’s possibly linked to the development of eSIMs for Internet of Things (IoT) use cases covering sectors like manufacturing and supply chains, where their use improves operational efficiency.
While Big Tech is free to do this, and has the technology and resources to develop products quickly, this approach of cherry picking certain areas of the telecoms network could negatively affect the industry.
Double-Edged Sword
The implications of Big Tech’s lack of infrastructural investment is concerning. Currently, SPs are entirely responsible for the physical infrastructure that keeps our modern digital societies connected. But as of yet, Big Tech’s shown no interest in supporting this activity.
If Big Tech continues to only cherry pick certain elements of telecoms it wishes to enter, it could jeopardise the revenue SPs can make from their products and services, reducing investment availability, which could then place the critical infrastructure under threat.
There’s buzz from regulators and consumers around the impact of Big Tech’s potentially anti-competitive app store practices. In the US, in February 2022 the Senate passed the Open App Markets Act, which seeks to remove the control of Apple and Google over their app stores, creating a more accessible and diverse market. Similarly, in the EU, in October 2022 the Digital Markets Act will be adopted, banning practices used by Big Tech to gatekeep information and encourage competition.
While these steps promote consumer choice and a fair market, regulators also must consider how Big Tech’s partial entry into telecoms could have a detrimental impact on infrastructure development. The juxtaposition we see is that Big Tech could provide much needed innovation to the telecoms industry, but the infrastructure required to support this innovation won’t exist. Mobilise offers a suite of advisory services, including strategy and regulatory policy consultancy, to assist SPs and regulators in navigating these uncertain times and to see Big Tech as an opportunity rather than a threat.
The tech-telecom convergence will undoubtedly shake up the market. But more consideration needs to be taken to ensure infrastructure investment remains stable and the market remains competitive.
About Mobilise
Mobilise is a leading provider of SaaS solutions to the telecommunications industry. Focused on delivering highly engaging digital-first service propositions with excellent customer experience, Mobilise has a proven track record, deep industry knowledge and a team of specialists to support clients to building and executing transformational strategies.
Clients range from large corporate organisations with over 100,000 employees to small enterprises with under 20 employees. Mobilise has a deep knowledge of the telecoms business model and our experience includes working with over 40 service providers across eight markets for brands including Virgin, Dixon’s Carphone, Red Bull Mobile, Manx Telecom and Freenet.
A seamless UX enabler
In its Top 7 trends shaping digital transformation in 2022 report, Mulesoft claimed the 2020s as the era of seamless digital experiences, enabled by modular software design. All more often, consumers are expecting the same quality of user experience (UX) from their service provider (SP) as they receive from tech giants like Amazon and Meta. Here, Hamish White, founder and CEO of telecoms SaaS solution provider Mobilise explains how a composable business model and a modular API-led connectivity architecture is an SP’s best friend.
Organisations that have adopted innovation must not just be able to use it, but use it well enough to deliver a seamless digital UX. Consumers expect the same highly engaging experience from every single brand they interact with, so smaller SPs must offer a UX that’s on a par with tech giants to remain competitive and keep their customers happy.
Offering digital services is essential in our modern digital society. A consistent, intuitive user interface is a core differentiator for SPs seeking a competitive edge, contributing to a positive CX and ultimately preventing churn. According to PricewaterhouseCoopers’ Future of CX report, 32 per cent of all customers would stop doing business with a brand they once loved after just one bad experience. So, a positive UX right from the start is crucial.
APIs Enter the Chat
In today’s digital society, data is king. But despite the widespread recognition of its power, most organisations don’t have a comprehensive data strategy in place. According to Capgemini’s Master the customer experiencereport just 21 per cent of brands have an integrated, holistic view of all customer information. For the others, data is scattered in silos in incompatible formats, and in some cases it’s not even captured and stored. But APIs help to solve these issues.
API-led connectivity links data to applications through application programming interfaces (APIs). It decouples data from the business logic and experience layer to create functions specifically with CX in mind. APIs are developed for specific purposes, but once created, they are reusable. So, adopting an API-led connectivity model allows an organisation to create ecosystems of applications that are modular, purposeful and reusable, enabling businesses to operate with more agility.
Elevating CX
Implementing API integrations, or an orchestration layer, into an organization’s digital infrastructure supports digital CX in many ways. APIs enable the full integration of external systems and third-party services so that processes appear seamless. What is actually a sequence of several individual processes and triggers behind the scenes, enabled through applications from several vendors, can appear as single interaction to a customer.
For example, in telecoms, when onboarding a new customer through an in-app eSIM subscription, subscriber provisioning, stock management and Know Your Customer (KYC) is all handled by APIs. Yet for the customer, all that’s required is the tap of a button.
For smaller SPs, having the resources and expertise to successfully implementing a API-led digital architecture may seem an impossible task. Mobilise’s HERO is a digital BSS platform that enables SPs to deliver digital-first customer experience. Through its orchestration layer, which is fully compliant with the TM Forum Open API Specifications, there are over 60 APIs available to integrate into front and back-end systems, for functions including self-service, eSIM provisioning, payments, in-app push notifications, marketplace for cross selling, and user profiles maintenance.
Preventing churn, maintaining satisfied customers and elevating CX is essential to success in the ever more competitive telecoms space. Creating a consistent, intuitive digital ecosystem, powered by APIs gives SPs the ongoing flexibility to adapt and keep pace with innovation.
About Mobilise
Mobilise is a leading provider of SaaS solutions to the telecommunications industry. Focused on delivering highly engaging digital-first service propositions with excellent customer experience, Mobilise has a proven track record, deep industry knowledge and a team of specialists to support clients to building and executing transformational strategies.
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Ian Terblanche, Global Strategic Sales & Channel Director at Sigfox
