MVNOs Are Here to Stay
© Vanilla Plus
- February 2008 -
Fergus O'Reilly
Mobile Virtual Network Operator (MVNO) subscribers are set to rise to 29 million by 2010, creating a market which is estimated to be worth over $10.7 billion, says the Yankee Group. However, more recent entrants to the MVNO market are learning from the misteps of their predecessors.
MVNOs have huge potential but newer entrants can learn some valuable lessons from their predecessors. The recent Disney/ESPN MVNO venture is a stark reminder that brand names alone are not enough to make the MVNO model work. Similarly, its essential that MVNOs fully inderstand their audiences communications habits. Many early MVNOs launched without offering prepaid payment plans when their target markets were often made up of teenagers and college students who tended to prefer prepaid offers.
Savvier MVNOs are now offering prepaid combined with postpaid in hybrid payment models. For example, parents could then recharge a child’s mobile prepaid account through their own post-paid account and be charged for all incoming calls from their child’s number. For families with one or more teenager, this can be an extremely attractive offer, while for the service provider’s marketing department, an extremely lucrative and competitive market offering.
This new era of brand marketing for wireless will undoubtedly drive a trend to prepaid billing and outsourcing OSS functions to specialised platforms and companies that exist to enable the non-telecom MVNO model. However at the same time this brings new back office considerations and challenges to the market. What does this mean for the market and what can be gained?
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