The MVNO market is growing and reshaping the whole telecoms & network operators business, as new entrants bring new ideas and new ways of doing things. So what should the industry do? Thomas Yde Frederiksen, Head of Tweakker, explains
Dylan’s famous lyrics “the times they are a-changin'” are perhaps nowhere more apt than in today’s cut-throat network service mobile wireless world. Where once high-value subscribers were the domain of mobile network operators (MNOs), now mobile virtual network operators (MVNOs) are targeting them with new service offers as well. No longer do MVNOs want 50 EUR accounts, but 250 EUR subscribers.
The telecom industry, with a focus on the MVNO space, is experiencing a shakeup as new wireless, cable and adjacent industry players are making their way into the market.
According to the research firm Global Market Insights, the MVNO market will reach US$85 billion annual revenues by 2022. Every year, MVNOs will be taking more market share from MNOs and this year is no exception with a further seventy being launched globally.
Going beyond mobile connectivity
MVNOs slowly started to expand their product offerings by adding diverse value-added services such as entertainment, streaming and even charity services. Becoming more than a voice and data service provider will have a deep impact on an MVNO’s bottom line and provides a way to differentiate from other players.
With the right strategy, MVNOs will grow their business outside traditional wireless services and lift customer spending in the process.
Historically, MVNOs succeeded in growing their customer base through targeted low-cost propositions designed for a narrow and well-defined customer segment. When adopting a multi-customer business strategy and thus adding new services to existing offerings, MVNOs are left to build new customer profiles based on data extracted from several sources such as data usage, user location, and billing. MVNOs must first acquire greater customer understanding to offer targeted upsell messages.
A profitable multi-customer MVNO business strategy requires great orchestration
Adding new services to the MVNO offering can have only a modest effect on sales and profitability, if not much thought is put into engaging the right customer segments with the right communications. Prepaid versus postpaid and consumer versus business needs multi-dimensional, precise targeting.
But a subscriber profile is still not complete without one of the most important elements for achieving the perfect customer understanding … handset specific data, knowing everything there is to know of end-users’ devices. Up-to-date device detection data and rich device capability information for each handset entering an MVNO’s network is gold and enables marketing operations to issue a clear-cut customer message of new applicable services for subscribers.
Chasing 10EUR customers leads to an early exit
With price wars dominating the mobile market, MVNOs have to find a way to build customer loyalty and make sure their customers don’t flee when a better mobile offer shows up. Acquiring “cheap” customers can be great for customer acquisition, but running after 10EUR customers should get MVNOs thinking and worrying about the long-lasting impact on their profitability and sustainability.
The problem of adopting a low-price strategy is that after onboarding a new customer, s/he forgets the MVNO, enjoys cheap service throughout the contract lifetime and eventually churns for the next cheap mobile deal. For any MVNO, this means low customer revenue.
MVNOs must be able to increase customer lifetime value rapidly by driving higher service consumption and better customer loyalty. Most MVNOs operate on tight profit margins, with discount MVNOs having a monthly ARPU lower than 10EUR, when the acquisition cost can go up to 40EUR per subscriber. With end-users always chasing the best mobile deal, MVNOs might never recover the acquisition cost, thus requiring injections of capital to stay afloat.
Only a handful of MVNOs are commercially successful
MVNOs can turn this situation around and change the monetization balance in their favor by minimizing the subscriber acquisition cost (SAC) and getting the customer lifetime value at least three times higher than SAC. Gaining an understanding of how monetization and subscriber acquisition are manifested in the MVNO setting comes as a first step. Subsequently, reaching business growth targets can be achieved by mitigating the acquisition costs and cultivating customer interactions for increased customer spending.
Automating MVNO engagement processes for increased customer lifetime value
MVNOs can now move from unsustainable customer acquisition costs to increased customer lifetime value while simplifying their business processes. Tweakker has such a framework within its MVNO Cloud services to tie everything together, enabling MVNOs to orchestrate each customer journey from the moment s/he joins the network.
Each subscription life-cycle should start with a warm customer welcome message. When subscribing for an MVNO’s services and joining the network, subscribers should receive a world-class welcome as part of the onboarding process. A new subscriber can feel valued with just a brief and timely greeting, but highly efficient in kicking off a good customer relationship. The welcome note can accompany the correct MVNO APN settings, needed to setup end-users’ devices with mobile data services.
Pro-active support goes a long way. Once on-boarded with MVNO services, end-users can be introduced to the MVNO’s self-care support platform for easy smartphone-related issue fixes. Being directed to an online device knowledge base helps customers know where to look for help when faced with a new handset or service issue. This can save end-users’ time from browsing online for help or from calling an MVNO customer care. In addition, regular callers to customer care can be reminded where to find help on their service provider website. The Tweakker Engagement Automation optimizes support processes by promoting the use of self-care, driving MVNO customers to help-content on their websites for their device model and reducing the workload for customer care agents.
Tweakker Engagement Automation enables MVNOs to orchestrate effortless customized engagement workflows, which can be automated with just a click of a mouse. MVNOs can grow their business through increased customer lifetime value and super-efficient operations, such as connectivity and support. The platform can be integrated into any MVNO internal system, updating them with latest customer information without human intervention.
Engaging customers from day 1
Faster adoption of new services, upsell of higher data plans, upgrades to new device models and other ways of increasing customer spending should always be at the top of an operator’s agenda. With MVNOs’ limited resources and thin margins, marketing campaigns need to be wisely executed and achieve an excellent return on investment.
In addition, with MVNOs allocating more resource to customer acquisition than customer retention, most of the time subscribers never hear again from their operator after signing up for their services. Worse, they receive mass messaging not relevant for their subscription or owned device.
4G devices go with 4G subscriptions
With 537 commercial LTE networks now available in 170 countries, 4G is mainstream in the mobile industry. Armed with 4G portfolios, MVNOs can strengthen their proposition by offering subscribers ultrafast LTE speeds.
When starting to offer new 4G services with 10 times’ faster data speeds, MVNOs need to accelerate subscribers’ migration to using such services. Orchestrating highly targeted marketing campaigns can help promote larger data plans, new value added services and LTE capable handsets.
Tweakker Engagement Automation can execute context-aware marketing campaigns triggered by real-time network events. The solution is able to build complete subscriber profiles, extracting data from MVNOs’ internal systems and adding Tweakker’s device specific intelligence.