Practical advice for Latin American MVNO
industry
Liudvikas Andriulis
Sao Paulo, May 2010
free minutes
given to customers for their shopping
Achievements
 5 countries, 7 MVNOs, 1 platform

Own MVNOs in JV with Carrefour

                                          ...
Retail MVNO go-to-market strategy
     No-frills mobile prepaid differentiated with retail-specific features and



Core pr...
Low-cost market proposition requires low-


One platform, 7
Centralized infrastructure
Centralized technical team
Low CAPE...
Speed and Flexibility- the key to survival
Retail environment dictates an incredibly fast pace through ever changing


  S...
Micromarketing and 3rd party integration
    Open system enables unique features and promotions
                          ...
Efficiency of operations
MVNOs have much less room for mistakes and inefficiencies



Efficiency
Maximum automation, Minim...
Open minded and proactive MNO partner
Successful MVNOs need hosts who intend to be aggressive on wholesale


  Helps monet...
Regulation which protects MVNO




   Ensures MVNO right toMVNO network and deploy own
              Modern use mobile
   ...
Sufficient airtime margin
40% airtime margin is the minimum on which MVNO can survive




  40% airtime margin
  is bare m...
Proper setup of wholesale organization
Empowered and proactive wholesale managers are MVNO ambassadors




Small team of d...
Practical Advice for Latin America MVNO market
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Practical Advice for Latin America MVNO market

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Slideset for Effortels speech in MVNO Forum 2010 in Sao Paulo, Brazil, May 2010.

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  • Practical Advice for Latin America MVNO market

    1. 1. Practical advice for Latin American MVNO industry Liudvikas Andriulis Sao Paulo, May 2010
    2. 2. free minutes given to customers for their shopping
    3. 3. Achievements 5 countries, 7 MVNOs, 1 platform Own MVNOs in JV with Carrefour 1 platform in Brussels Italy Taiwan Belgium Poland 5 countries MVNE customers 7 MVNO’s 6 MNO integrations Italy Poland Oman MNO Integrations Belgium Italy France Poland Taiwan Oman
    4. 4. Retail MVNO go-to-market strategy No-frills mobile prepaid differentiated with retail-specific features and Core product Result Attractive and simple mass-market No-frills mobile prepaid proposition Honest, clear price promise Unique promotions No confusing price plans Instantly marketed to millions of shopper Recurring contact with subscriber Differentiation Much lower SAC compared to industry Retail-integrated mobile prepaid Much lower churn Part of the loyalty program Seamless integration with check-out systems Integration with shopper behavior analysis systems Communication Utilization of POS marketing opportunities Visible starter kit placement Services materialization Presence in catalogues, posters, etc.
    5. 5. Low-cost market proposition requires low- One platform, 7 Centralized infrastructure Centralized technical team Low CAPEX, low OPEX Low maintenance cost & low Lean organization 5-6 employees per MVNO Super-flat organization structure All non-core activities outsourced Activities as centralized as possible Low subscriber Retail synergies exploited to the maximum No above-the-line advertising Shop is the TV
    6. 6. Speed and Flexibility- the key to survival Retail environment dictates an incredibly fast pace through ever changing Speed Retail environment dictates fast pace Weekly, not quarterly activity planning Idea on Monday, promotion by Friday Daily price corrections Daily offers and promotions Time to market- 2 weeks Flexibility Retail environment is always changing Fluid mix of communication channels Changing segment tactics Changing physical environment Changing competitive landscape
    7. 7. Micromarketing and 3rd party integration Open system enables unique features and promotions 10 free minutes for buying this product Micro Retailers identify hundreds of shopper segments Hundreds of segments require hundreds of offers Tens of small promotions are executed every day in every store Ability to cater to micro segments is of ultimate importance Constant micro marketing is key to retail MVNO Integration and openness Differentiation comes from integration with non- telecom systems Loyalty program integration allows retention programs Behavior analysis systems allow segment-based marketing Carrefour Telecom, Taiwan. Product catalogue with a free minute offer.
    8. 8. Efficiency of operations MVNOs have much less room for mistakes and inefficiencies Efficiency Maximum automation, Minimum human work Service design has to be flawless: a mistake can kill the business Painless operation: focus on development, not problem solving Only efficient MVNOs survive Reliability and resilience Real-time billing for prepaid and postpaid is a must MVNOs are the first target of fraudsters Real time reporting very important Constant monitoring of all systems needed Very little room for technical fault
    9. 9. Open minded and proactive MNO partner Successful MVNOs need hosts who intend to be aggressive on wholesale Helps monetize spare network capacity High margin Additional revenue without SAC investment: MVNO invests on MNO behalf MVNO also invests into customer care and retention, saving OPEX on MNO side Negligible OPEX (wholesale dept. can be run with 4 people) Attracts new segments (e.g. captive shoppers of retailers, ethnical segments) Helps alleviate churn impact: churn to MVNO is better than churn to competition Done right, wholesale becomes a multimillion dollar business for MNO– with gross margins as high as 80%.
    10. 10. Regulation which protects MVNO Ensures MVNO right toMVNO network and deploy own Modern use mobile technologies Forbids exclusivity tie- ins Clearly defines subscriber base ownership Clearly defines service quality requirements Does not regulate commercial aspects of MVNO/MNO relationships Modern regulation protects MVNO investment while leaving commercial conditions up to negotiations between parties
    11. 11. Sufficient airtime margin 40% airtime margin is the minimum on which MVNO can survive 40% airtime margin is bare minimum to sustain a growing MVNO Cost-plus model is the most efficient way to achieve pricing consensus between MNO and MVNO MVNO should keep the majority of interconnect revenues Insufficient airtime margin hinders growth, which hurts both MNO and MVNO By providing MVNOs with sufficient airtime margin MNOs help scale up fast Which results in MNOs earning more money too.
    12. 12. Proper setup of wholesale organization Empowered and proactive wholesale managers are MVNO ambassadors Small team of decision makers from Team of business-minded professionals sourced commercial departments Empowered to take fast decisions and bypass the red-tape Able to understand the market, customers, competition and react to changes Small independent team with minimum overhead and flat organization Strong, professional and empowered MNO wholesale team is crucial for MVNO success
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