The MVNO Phenomenon

Getting it right can seal the fate of the MVNO or MVNE, and that’s just the table stakes – time to market and agility ups the ante altogether.
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MVNO: a global trend

In a report focused on MVNO strategies to help European operators become profitable, Danish analyst firm Strand Consults Strand cites Korea as a case study where increased regulation has forced incumbent operators to launch sub-brands to address specific customer segments, differentiate mobile offerings, reduce churn, and increase average revenue per unit (ARPU) with great success.  Strand calls the global MVNO phenomenon the “Danish Flu” and claims the MVNO trend originated in Scandinavia and then spread to Norway, Finland, Germany, Belgium, Spain, France, and many other countries.  Finish mobile provider TeliaSonera appears to support this point with nearly 30 brands under which it markets its services in 15 countries.

In China, a once closed market, easing regulation has led to the recent introduction of MVNOs opening the door to the world’s largest population and over one billion potential Chinese mobile subscribers. Marbridge Consulting recently reported that China Telecom has now submitted a list of 16 potential MVNO partners while China Unicom has already approved 14 and China Mobile is still holding their cards closely to their chest. 

India’s Department of Telecommunications (DoT) eased regulation and opened the door to MVNOs back in 2009. However, the uptake seems to be moving much slower due to continued uncertainty surrounding the specific MVNO rules and regulations.  Most notably, Virgin had made significant headway in the Indian market with Virgin Mobile India through a joint venture with Tata Teleservices. However, they all but exited the Indian market in 2011, selling their stake in the joint venture to Tata while keeping their branding agreement in place under which they still received royalty payments.

MVNEs: The enablers

The complexity for virtual offerings can be exponentially more challenging to manage. With multiple regions, plans, brands, systems and network providers, it’s a daunting task. Getting it right can seal the fate of the MVNO or MVNE, and that’s just the table stakes – time to market and agility ups the ante altogether.

Toronto-based Redknee, a convergent billing, charging, policy and customer care solution provider has been one of the pioneers behind the MVNO trend by helping Tier-1 and Tier-2 MVNEs and MVNOs enable and optimize their virtual offerings. In 2010, Redknee announced that it had won a series of MVNO/E deals including a European Tier 1 and “Multiple Tier-1 MVNO Converged Billing Contracts” in APAC, EMEA and the Americas.  The company’s cloud-based, convergent platform helps operators easily address new markets by leveraging a common solution and makes it ideal for virtual offerings. Its award-winning and patented products have been recognized by major industry analysts and have been deployed by operators around the world to address complex deployment scenarios. Redknee’s years of global experience make them a formidable competitor and a key contender for global carriers looking for solutions to tap into the MVNO/E trend.

In August of 2012 Redknee announced another Tier-1 win at NA operator which was looking to fast-track an MVNE offering and that already had a strong legacy infrastructure in place. The Redknee solution is part of Microsoft’s Mashable Ecosystem, which provides Microsoft partners with a carrier-grade platform they can exploit to create agile, industry-specific solutions.

This is a significant win for the Redknee solution which also included Microsoft Dynamics CRM and Accenture as the system integrator. It wasn’t an easy sell against a large incumbent OSS/BSS provider, but the “business value drove the decision,” according to Dmitri Lozdernik, Industry Director, Worldwide Communications Microsoft, who had insights into the deployment.


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