A User Centric Always Best Connected Service Business Model for MVNOs


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A User Centric Always Best Connected Service Business Model for MVNOs

  1. 1. Session IV Mobile Connectivity Platforms “A User Centric Always Best Connected Service Business Model for MVNOs” Anwesh Adhikari (Waterford Institute of Technology, Ireland) Miguel Ponce de Leon (Waterford Institute of Technology, Ireland)
  2. 2. N°2 Summary of the Paper • Current state of MVNO model. • Opportunity for MVNOs in IP-based communication services. • Introduces a new MVNO as a Broker (MVNOB) model. • Analyses the characteristics of the conceptual MVNOB model.
  3. 3. N°3 Motivation • Limited usefulness of technology-push factor in the diffusion and adoption of new technology and services [2]. - Calls for market-pull business models. • Growing popularity of flexible and agile business models (Eg. SaaS, PaaS). • Service Provider Model is seen as the best framework to promote innovation in the mobile communications market [6].
  4. 4. N°4 Limitations of Current MVNO Model • Current MVNO model is based on the concept of reselling [9]. • MNOs can set the network lease prices high enough to increase the barriers to entry for MVNOs [10]. - Long term viability of MVNO is unclear from the existing telecom industry structure [15]. • Promotes cost leadership over service differentiation. - Higher customer churn rate and lower profit margins.
  5. 5. N°5 IP-based Application Services • Formerly distinct industry sectors like telecom and content industries are converging over IP. - Provides better differentiation possibilities for focussed virtual operators [10]. • Industry structure has an impact on service usage [18]. • Vertical network applications can be integrated into one IP-based convergent network for both fixed and wireless communication services [19].
  6. 6. N°6 The Missing Perspective • User-centric view. - Users contend for a network connection instead of operator networks contending to satisfy the users service. • SAHARA model [48] considers the service composition across multiple providers. - MVNO and MNO agreements are static and agreed long in advance making user dynamic inefficient. • Perimeter project [49] - Development of services independent and portable of the underlying access and transport network.
  7. 7. N°7 Value Chain to Value Network • Vertical integration of the telecom industry will be unable to satisfy the new range of VAS [15]. - More collaborative business models based on core competencies are likely to emerge [19] [22] [26]. • Next generation mobile services will leverage robust access platforms [15], with the emergence of a dedicated service composer [26] [28]. - MVNOs are in a better position to deliver innovative VAS as more tightly integrated partners with MNOs [30].
  8. 8. N°8 MVNOB Business Model
  9. 9. N°9 Actors and their Roles • MVNE - Role: Technical outsourcing partner to the MVNO. • Possible candidates: Existing MVNEs, System Integrators, Equipment vendors, Internet Services Companies, and MNOs. • MVNO - Role: Customer facing. • Possible best candidate: Grocery and General Merchandising Retailer. • MVNOB = Service Composer + Retailer
  10. 10. N°10 Market-pull Factors • Cost of delivering mobile data is likely to exceed incremental revenues and become unsustainable for the mobile operators by 2013. Chetan Sharma Consulting [43] • Customer life-cycle management is hard to implement in pre-paid mobile services, 3/4th of the global mobile customers are pre-paid ones. McKinsey [44] • Flat-rate-based business model is likely to commoditise MNOs as bit pipe carriers. [43] [45]
  11. 11. N°11 Revenue Model • Reduces cost by adopting a common standard (IP). • Promotes successful resource sharing as the actors are business-wise decoupled. • Encourages service differentiation through real-time open negotiation for services and network access. - This will become especially prevalent with the deployment of IMS. • Capable of supporting various billing plans, and generating a single bill for the customer of all the services consumed from multiple-MNO. - eg. pay-per use/view/time • Possible Long Tail Effects.
  12. 12. N°12 Adoption Prospects [50] • Relative Advantage - Economic benefit of service bundling. - Micro-segment customer offerings. • Compatibility - Orchestration of the services from different MNO platform for customer-specific delivery is probable over the Internet Protocol. - Major issue could be non-technical due to the likely resistance from the MNO to give away control over the service delivery.
  13. 13. N°13 Adoption Prospects Complexity - Shifts product life-cycle management from an off-line to a real-time process. Trialability - Will mainly depend on service attributes, personalisation, and the management of personal identifiable information within the ecosystem. Observability - Social activities like sharing and recommendation by the users are likely to have a major influence on the subscription of the services.
  14. 14. N°14 Conclusions • The suggested MVNOB model: - Changes the telecom industry structure by introducing a service composer between the MNO and the customer. - Envisage dynamic formation and dissolution of user-network relationships of short time-scales. - Promotes a unique service by making available the various services from multiple-MNO under a single umbrella. • MVNOs need to rethink their strategy and consider positioning themselves as a broker of services in a multiple-MNO ecosystem, with MVNE as their technical partner.
  15. 15. N°15 Thank You for Listening!
  16. 16. N°16 References [2] R. Baskerville and J. Pries-Heje, ”A Multiple-Theory Analysis of a Diffusion of Information Technology Case”, Information Systems Journal, vol. 11(3), pp.181-212, 2001. [6] C. Cuvelliez, ”Study of Implementation Models of Mobile Virtual Network Operator (MVNO)”, PhD Thesis, Univ. Libre de Bruxelles, Univ. DEurope, Belgium, 2006. [9] P. Curwen and J. Whalley, ”Tele2 and the strategic role of virtual operations”, Q Emerald Group Publishing Limited, vol. 9 no. 4, pp. 55-69, 2007. [10] T. Smura, A. Kiiski and H. Hammainen, ”Virtual operators in the mobile industry: a techno- economic analysis”, Netnomics, vol. 8, pp. 25-48, 2007. [15] D.H. Shin and M. Bartolacci, ”A study of MVNO diffusion and market structure in the EU, US, Hong Kong, and Singapore”, Telematics and Informatics, vol. 24, Issue 2, pp. 86-100, 2007. [18] A. Kiiski, ”Mobile Data Service Industry Structure: Walled Garden vs. Horizontal Integration”, Research Report of Networking Laboratory, Helsinki University of Technology, 2003. [19] P.T Chen and J.Z Cheng,”Unlocking the promise of mobile value-added services by applying new collaborative business models”, Technological Forecasting and Social Change, vol. 77, Issue 4, pp. 678-693, May 2010. [24] M. Castells, ”The information age: Economy, Society and Culture”, 2nd edn, Oxford: Blackwell, 2000. [26] J. Hultell, K. Johansson, J. Markendahl, ”Business models and resource management for shared wireless networks”, Vehicular Technology Conference, 2004. VTC2004, IEEE, vol.5, pp. 3393- 3397, 26-29 Sept. 2004.
  17. 17. N°17 References [28] T. Kohlborn, A. Korthaus,C. Riedl, H. Krcmar, ”Service aggregators in business networks”, Enterprise Distributed Object Computing Conference Workshops, EDOCW 2009, 13th, pp. 195- 202, 1-4 Sept. 2009. [30] S. Ulset, ”Mobile virtual network operators: a strategic transaction cost analysis of preliminary experiences”, Telecommunications Policy, vol. 26, Issues 9-10, pp. 537-549, October-November 2002. [43] Bridgewater Systems, ”Whitepaper: Towards a Profitable Mobile Data Business Model”, Available: http://www.bridgewatersystems.com/Assets/Downloads/Whitepapers/Bridgewater_Towards_a_Pr ofitable_Mobile_Data_Business_Model.pdf [28 July 2010]. [44] A. Levisse, N. Manuel and M. Sjolund, Getting more from prepaid mobile services, The McKinsey Quarterly, 2008. Available: https://www.mckinseyquarterly.com/Telecommunications/Getting_more_from_prepaid_mobile_se rvices_2108 [28 July 2010]. [45] A. Banerjee, Insight on Service Provider Innovation: A Global Study of Services, Emerging Business Models and Marketing Evolution. Yankee Group, 2008, Available: http://www.openet.com/company/newsevents/press-releases?id=113 [28 July 2010]. [48] B. Raman et al., ”SAHARA Model for Service Composition Across Multiple Providers”, Lecture Notes in Computer Science, Pervasive Computing, vol. 2414/2002, pp. 585-597, 2002. [49] F. Cleary, M. Fiedler, L. Ridel, and A. Cihat Toker, ”PERIMETER: Privacy-Preserving Contract- less, User Centric, Seamless Roaming for Always Best Connected Future Internet”, Wireless World Research Forum (WWRF), Meeting 22, 5-7 May, 2009.