How do I choose the right MVNA or MVNE?
1. What is an MVNA and an MVNE?
In order to deliver its products and services two things are critical for an MVNO: (a) it must have access to a host MNO’s radio network and, (b) it must have a system for managing its products and subscribers.
Very large MVNOs will often negotiate their own wholesale agreement with an MNO and install their own technology systems to deliver their products. But this requires a considerable amount of time and money and not every MVNO is sure it wants to start out with this kind of expenditure. Using an MVNA or MVNE can save you a lot of time and money and enable you to launch an MVNO on a tighter budget.
An MVNE connects to a Mobile Network Operator (‘MNO’) in order to give its customers – the MVNOs – access to the MNO’s radio network. The MVNE platform then provides services to the MVNO such as billing, business workflow, product setup, service delivery, customer care, fraud management, web services, reporting, sales platforms and so on.
An MVNO which is a customer of an MVNE will enter into its own wholesale agreement with the MNO but will use the MVNE platform in order to deliver its products.
An MVNA is exactly like an MVNE, providing a complete technology platform for managing the operations of the MVNO, with one important addition: the MVNA negotiates its own wholesale agreement with the MNO and provides the radio access to its clients, the MVNOs, via this agreement. This means that MVNOs can launch on an MVNA platform without any direct negotiation with an MNO can dramatically reduce time and cost to launch.
2. Why use an MVNA or MVNE?
MVNOs use MVNAs and MVNEs for a variety of reasons including:
- keeping operations simple and focused: by outsourcing the technology platform there is a greatly reduced need to employ and manage IT staff, enabling the MVNO to focus on marketing, customer acquisition and service
- reducing risk for the new venture – using a proven technology platform which is already integrated with the MNO removes one of the major components of operating risk from the business
- getting to market quickly – months, or even years, before they would be able to launch otherwise
- test marketing an MVNO product on a reduced upfront expenditure
3. What is the right MVNA/E for my MVNO?
MVNOs work in markets where there is:
- increasing competition
- downward pricing pressure
- often a focus on voice and text in their product design. Only very large MVNOs can guarantee the MNO enough data traffic to be able to get really competitive wholesale pricing on data
On the other hand MVNOs have some real advantages over MNOs in their opportunities to be flexible in product design and targeting. These advantages include the ability to:
- change products quickly as they do not have expensive marketing campaigns and large entrenched customer bases
- target small and potentially profitable niche markets which MNOs cannot afford to address
Using the right MVNA/E can help your business by providing:
- a platform which enables you to respond quickly to competitive offers
- a number of ways for you to differentiate your services and target your niche markets
- an easy way to adopt new technologies
- the ability to deliver MVNO products with a reduced upfront capital investment
So, what should you look for in an MVNA/E?
Obviously you need them to be connected to a solid MNO. No matter what else the MVNA/E offers you, your MVNO product is only as good as the network you are on. If the data connection is too slow or the network coverage is poor you will struggle to gain a good reputation and win customers.
Flexible commercial arrangements with your MVNA/E will help you build the MVNO on the right financial terms for your business. You might be looking for zero upfront capital investment (this will generally require a higher payment per subscriber and probably minimum guarantees, but the ability to use all available funds for marketing to acquire subscribers can be handy). On the other hand, you may wish to invest some capital at setup in return for lower operating costs. Ideally, your provider should be able to respond to your reasonable financial structure to give you the best chance of success.
A reliable and flexible technology platform is also needed. But let’s look further into what this means.
1) You should have direct access to tariff and product design so as to respond quickly to market pressures. Some MVNA/E providers don’t provide you with simple (usually web-based) access to the right tools to manage your own products. Instead they want to handle this for you which usually means long delays and additional costs. The decision is up to you but it makes sense to at least have access to the tools.
2) You need comprehensive standard reporting and the ability to run custom reports when needed. Daily, or at least weekly, reports must be analysed closely. They will give you great guidance in what needs to be done to combat competitive special offers, regional weaknesses in distribution, and so on. They are critical in keeping your MVNO operating well.
3) You will also want access to a full range of deep packet inspection (“DPI”) tools. Data is fast becoming the most important part of the product mix and the ability to offer suitable data products is essential for winning customers away from competitors. You might want to be able to offer free Facebook or WhatsApp, or have special offers on tariffs to partner websites. Check carefully with your MVNA/E how well their platform can support these kinds of offers.
4) The ability to offer interesting products beyond standard minutes, texts, MB will help you differentiate your product and create meaningful products for your customer niche. Credit and balance transfer, multi-IMSI, money transfer (national and international), VoiP calling products, loyalty and points bonus schemes, ease of integration with other companies and their databases are all tools you want in your product kit.
5) Good customer service tools are a must. For most MVNOs providing good customer service is an essential part of the marketing message. Without good tools providing timely information and flexible communication options (phone, email, web chat, Twitter, etc) you will struggle to provide your subscribers with the service levels that will make them recommend you to their friends. You want your MVNA/E provider to offer these tools as part of their core product – a ‘one-stop shop’ will save you money and time.
6) Campaign tools will enable you to communicate new offers to your existing subscribers which can have positive effects on ARPU, loyalty, and recommendation rates. Look carefully at the campaign management tools which your provider offers. Like customer service tools, these should be an integral part of your provider’s platform.
7) You may want to look at a provider which offers the option of a Full MVNA/E. A Full MVNA/E uses a technical architecture which means that your subscribers use an IMSI which is your own. This can be useful because if you are not using your own IMSI it is very difficult to move your subscribers away from the current provider. The only way you can do this would be by swapping the subscribers’ SIMs - this is very difficult to do and usually results in a significant loss of your subscribers. Although it can cost more, having your own IMSIs can assist you negotiate a better wholesale deal and will also give you a higher equity valuation on your MVNO.
For many MVNOs, the MVNA/E approach is the right one. They present the MVNO with the potential to reduce risk, time to market, time to profit and enhance commercials, product, customer service and marketing.
Given the critical role they play in your MVNO business, choosing the right MVNA/E is essential. Make a check list of features which you require and do careful research with your proposed vendor before making your choice. With the right company working with you as a partner you will provide yourself with the best basis for your new MVNO.
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