Understanding the Industry Before a Successful MVNO Launch
Posted On: December 19, 2016
The telecom industry has transformed significantly in the last decade, and MVNOs have emerged to take advantage of these changes. This MVNO Europe model has attracted various non-telecom companies to boost their revenue by offering communication services to their existing customers.
However, many virtual operators fail soon after launch, due to the lack of business knowledge, competitive tools, and support solutions. Thus, understanding of the basics of a mvno, how it operates, and related challenges & solutions is essential for a successful launch & growth.
To begin with, the MVNO (Mobile Virtual Network Operator) model is a GSM process, wherein a company delivers communication services without a licensed spectrum and a network infrastructure. A company uses its brand name to resell wireless services over an existing operator’s network under a business contract. Generally, an MVNO Europe buys minutes of use from its parent operator and then resell the same to their subscribers.
The trend of MVNOs began from the European telecom market and slowly spread to African, USA, and Asian markets. As per a report by Grand View Research, the MVNO market is expected to grow at a CAGR of 9.4% from 2014 to 2020. The estimated market value for virtual operators in 2020 is $73.20 billion.
Apart from the borrowed network infrastructure and spectrum, an MVNO has complete control over the marketing, branding, billing, SIM card, and customer care operations. Some of the characteristics of a virtual operator are discussed below:
- MVNOs don’t own a wireless spectrum or infrastructure but give a virtual appearance that they own one. The wireless capacity is taken on lease from a traditional operator, repackaged, and delivered to a specific industry vertical.
- With MVNOs having complete control over the functions related to customer care and billing, they own their customers completely.
- Virtual operators commonly deliver voice and data services to their subscribers under a prepaid agreement.
Along with this understanding of a mvno and its characteristics, having a knowledge of services and support solutions available is also essential.
As per the present scenario, the MVNO market is limited, but the growth of wireless data services will increase the applications of these virtual operator services as well. For instance, a subscriber might be able to subscribe to MVNO data only services from one operator, while using voice services from the other one.
MVNOs might also start selling VPN (virtual private network) services, ensuring high privacy for their subscribers. Thus, MVNOs and their parent operators could start focusing on specific niche markets with customized services to expand the brand value and customer reach.
Support solutions for MVNO
An excellent customer support is what service providers strive to deliver. Attractive offerings accompanied by a great customer service can effectively attract a huge number of users.
Customer care is a vital metric of MVNO performance measurement, as switching from an MNO poses some great challenges to the new subscribers. The problems faced by users while onboarding an MVNO and the high value of user experience demands a comparable support service to that offered by MNOs.
Cost Effective Self-Care Solutions
Tefficient’s industry analysis 2015 report #1 found that an average of 15-20% of mobile operators’ revenue is spent on customer acquisition & retention. Here, in the case of lower profit margins, MVNOs should grab every revenue generating or cost saving opportunity.
A mobile self care solution, empowers customers to get their queries resolved without contacting an agent. This helps MVNOs save a huge on support costs as well as more time to focus on delivering better services to end-users.
Thus, for a virtual operator to be successful, it is essential to understand the MVNO Europe basics, characteristics, services, and support solutions available. Deploying effective support solutions for MVNO along with a detailed research on the useful services for the target audience helps streamline operations, improve service, and attract higher business revenue.