Mvno Mvne Indentifying New Business Opportunities

www.comarch.eu Comarch 2009 Becoming an MVNO / MVNE Identifying new business opportunities

Categories of MVNOs - overview

Discount MVNOs – providing competitive prices , typically with lower revenue per customer, often in the prepaid-only model ; typically offering simple services (e.g. voice and SMS only) and cheaper handsets

Niche MVNOs – providing tailored services to niche markets ( youth, ethnic groups or specific business users ); t hese segments require specific offerings with many value - added services and add-ons for the service to be found attractive by potential customers

Categories of MVNOs - overview

Retail MVNOs – providing services for end customers via existing points of sale; subscribers can purchase a SIM card and top-up their account during a visit to a supermarket

Advertising-Driven MVNOs – providing a specific amount of free minutes, SMS and content to their subscribers, in exchange for sending advertisements to subscriber mobile phones

Brand MVNOs – providing similar offerings as traditional mobile operators but taking advantage of their strong, recognizable brands and customer loyalty

A lot of MVNOs originate from industries other than telecommunications!

The MVNO value matrix

MVNO – how to choose a business solution?

As an MVNO you should take the following key factors into account when choosing a business solution :

Easy service construction – reduces development and deployment time and cost

Low cost of operations

Fast innovation – required to attract new customers and retain current ones, enables a fast response to offers from competitors

System flexibility – readiness to cope with a broad range of today’s and future services

Possible deployment models for an MVNO solution

Single MVNO model

the MVNO platform is hosted by the platform vendor (in a data center) and runs solely for the virtual operator

t he MVNO negotiates the traffic wholesale agreement with the mobile operator by itself and utilizes the outsourced platform , takes care of appropriate marketing and sales channels management

advantage = no intermediate party between the network operator and the MVNO in this case

disadvantage = economies of scale when it comes to deployment and maintenance are not fully utilized

MVNO aggregator model

third party („aggregator”) plays the role of a middleman between the mobile network operator and multiple MVNOs

the aggregator is responsible for negotiating the agreement with the MNO and resells the traffic to all MVNOs hosted on the platform ( maintained by the platform vendor and hosted in d ata c enters )

MVNOs are responsible only for the front-office operations of their mobile businesses

advantage = further reduction of up-front investments necessary to start the operations

disadvantage = aggregator applies its margins using the costs of the mobile operator’s network capacity usage

M ultiple MVNO model - the third party is not involved and the mobile operator deploys its own mobile virtual network enablement platform

New business opportunities for MVNOs

mobile-only operators will lower prices to advance fixed-mobile substitution

new companies with disruptive technologies (like VoIP) will compete by offering even cheaper voice packages

increasing need for mobile operators to fill their networks

(e.g. 3G or 4G )

r egulators will demand further roaming and interconnection reductions

The number of subscriptions to MVNO operators and resellers is forecast to grow 44% from 104.1 million at end-2009 to 150.3 million by end-2013 – a compound annual growth rate (CAGR) of 9.6% ( Global MVNO Markets report, Informa Telecoms & Media)

Win-win situation (MVNO vs. mobile operator)

An MVNO can convince a mobile operator by offering:

Analysis of new market opportunities demonstrating potential new revenue streams

Evaluation of new revenue streams and revenue sharing offers to provide money making opportunities for both partie s

New distribution channels and services targeting new customers in new niche markets

Possibility to reduce churn and increase customer retention by providing better customer care within segments and by utilizing MVNO’s brand loyalty

Established chain of partners providing content or VAS

Increased reach and scope of the offer - consumers get a wider choice (MVNO offer vc. host operator’s offer) – which increases the chance of them choosing the host network

Lower c osts on marketing , customer acquisition and maintenance , handset subsidies

An MNO-MVNO cooperation model

Comarch solution - logical architecture The diagram presents the logical architecture of the full Comarch MVNE solution and possible interaction between platform components, a hypothetical environment of one MVNO and external or third-party systems. Depending on your needs, Comarch is able to build an IT platform of all or a subset of the above. Modular architecture makes it possible to upgrade the platform in the future as new requirements are identified.

Comarch solution for MVNOs – basic facts