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The Future of MVNOs - Informa Whitepaper

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The Future of MVNOs
Strategies to succeed with MVNOs in Latin Americawww

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  • 1. Your global research partner The Future of MVNOs Strategies to succeed with MVNOs in Latin America www.informatandm.com
  • 2. Contents About the authors......................................................................................................... 3 Understanding the global picture ............................................................................. 4 The outlook for MVNOs in Latin America .................................................................. 4 Opportunity for MVNO-led pricing arbitration is low.................................................. 5 Triple play will remain a major MVNO driver ............................................................ 6 Beyond the “telecoms MVNO”: The retailer, the financial and the youth MVNO....... 7 The MVNO quadrant: Global and regional case studies.............................................. 8 Global MVNO survey .................................................................................................... 10 © Informa UK Limited 2012. All rights reserved. The contents of this publication are protected by international copyright laws, database rights and other intellectual property rights. The owner of these rights is Informa UK Limited, our affiliates or other third party licensors. All product and company names and logos contained within or appearing on this publication are the trade marks, service marks or trading names of their respective owners, including Informa UK Limited. This publication may not be:(a) copied or reproduced; or (b) lent, resold, hired out or otherwise circulated in any way or form without the prior permission of Informa UK Limited. Whilst reasonable efforts have been made to ensure that the information and content of this publication was correct as at the date of first publication, neither Informa UK Limited nor any person engaged or employed by Informa UK Limited accepts any liability for any errors, omissions or other inaccuracies. Readers should independently verify any facts and figures as no liability can be accepted in this regard - readers assume full responsibility and risk accordingly for their use of such information and content. Any views and/or opinions expressed in this publication by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/or opinions of Informa UK Limited. 2 © 2012 Informa UK Ltd. All rights reserved. www.informatandm.com
  • 3. About the authors Dario Talmesio Daniele Tricarico Principal Analyst Senior Analyst Dario Talmesio, a principal analyst with Informa Telecoms Daniele Tricarico is a senior analyst covering Latin & Media, leads the Mobile Europe team, focusing on market America at Informa Telecoms & Media. He examines developments and competitive dynamics of the European operator strategies with a focus on operator performance, markets. He advises European mobile operators in key mobile networks and service strategies, including VAS areas of their business including competitive issues, market and MVNOs. He regularly writes in-depth analysis and marketing positioning, MVNO and retail strategies, new and reports, and contributes to bespoke research and business models, and FMC and FMS strategies. consulting projects in the region. Daniele has also developed a series of international conferences on Dario began his analyst career at the Economist Group’s telecoms networks and infrastructure, such as the IMS2.0 Economist Intelligence Unit, where he focused on the energy World Forum, the SDP Global Summit and the Femtocells and telecoms markets in Western European countries. Forum. Before joining Informa, he worked for the Yankee Group as an EMEA mobile consumer analyst based in London. Prior to joining Informa, Daniele worked as a social media analyst for consulting firm Interaction London. Dario holds a degree in Business and Economics from the Fluent in English, Spanish and Italian, Daniele holds an Universita Cattolica of Milan and an MA in Applied Social MA from the University of Bologna and an MSc in new and Market Research from the University of Westminster media and information systems from the London School in London. of Economics. Follow Dario on Twitter @dariotalmesio Follow Daniele on Twitter @dtricarico Working with Informa Informa Telecoms & Media’s strategic insights, key market data and forecasts have led the market for more than 25 years. We have 65 analysts in nine research offices offering pragmatic and actionable advice to the leading global players in the telecoms and media sector. Our clients represent all parts of the value chain, from telecoms operators to pay-TV providers, from content providers to device manufacturers. Our syndicated research and comprehensive databases provide vital data and analysis focusing on the global telecoms and media markets, and are widely used and valued by industry professionals and thought leaders. We also provide a range of consultancy and bespoke research services, including white papers, webinars, strategy sessions and executive presentations. For more details on Informa Telecoms & Media and how we can help your company identify future trends and opportunities, please contact Marco Esposito, marco.esposito@informa.com or +44 (0) 7884 400 999. © 2012 Informa UK Ltd. All rights reserved. www.informatandm.com 3
  • 4. America and Western Europe will still account for the vast majority (see fig. 1), new markets are developing – Latin America, Africa, Middle East and Asia are all experiencing great MVNO interest. Understanding the global picture A new phase of MVNO expansion is beginning MVNO markets have gone through various stages of development in recent years. Since the first introduction of MVNOs in the 1990s and the second wave of proliferation in the mid-2000s, the number of players has increased and contracted in cycles. The attitude of mobile operators has gone through some radical changes: Initially, the mobile operators fought against MVNO legislation and the MVNOs themselves; then they accepted the existence of MVNO players; and then they started eagerly seeking new MVNO partners and developing aggressive wholesale strategies. When their offering is appropriately designed, MVNOs can be a win-win-win market: host operators can reach additional – actual or potential – customers in a way that is more efficient compared with what their own retail networks can do; wholesale partners can enrich their existing nontelecoms services with mobile connectivity, or extend their brands into the telecoms sector; and customers can benefit from a more accurately-segmented offering. Informa believes that a rejuvenated phase of expansion is beginning. In markets where MVNOs have traditionally played a role, typically Europe, Asia Pacific and North America, MVNO players are consolidating and internationalizing but, despite this, they are continuing to grow in many segments. MVNO markets, the MVNOs can account for approximately 15-20% of the customer base, a level that is generally considered physiologically sustainable. There are still many market segments untapped by the mobile network operators that are being addressed by MVNOs – these include the ethnic markets, data-only connectivity, and community-led and retailer-owned MVNOs – and there is also a strong push from mobile operators wanting to increase their share of mobile wholesale revenues. Informa believes that virtually every mobile market has the potential to benefit from MVNOs, and every mobile operator can derive an advantage from MVNOs. The global MVNO market will reach 186 million subscriptions by the end of 2015. Although North Fig. 1: Global, number of MVNO launches, by region, 1991-2010 Western Europe 46% Eastern Europe 14% Africa 2% Middle East 2% North America 21% Latin America 3% Source: Informa Telecoms & Media 4 Asia Pacific 12% © 2012 Informa UK Ltd. All rights reserved. www.informatandm.com However, the reality is that, in the vast majority of mobile markets, MVNOs do not exist at all, while in some markets, MVNO activity is still in an embryonic phase. In developed The outlook for MVNOs in Latin America The market is still embryonic, but there is significant potential for growth Typically, Latin American MVNOs have been the domain of existing telecoms companies keen to offer converged fixed/ mobile bundles. The most notable examples include the ISP Maxcom and the cable player Megacable in Mexico, ISPs UNE and ETB in Colombia, and Telsur/GTD in Chile. The first nontelecoms MVNOs appeared only in the second half of 2010. Initially, Colombian TV group RCN launched Uff, an MVNO offering cheap longdistance calls to fixed and mobile numbers in the main countries where the Colombian expats live. Then, in mid-2011, the region saw the first retailer launch, when Costa Rican electronics and furniture retailers Grupo Monge and Casa Blanca introduced Fullmovil. The mobile network operators (MNOs) have finally started to look with interest at the wholesale model – and the initial figures are encouraging. For example, Uff in Colombia is already a sizable MVNO, with close to 250,000 subscribers at the end of 2011 (see fig. 2). In Brazil, where formal MVNO regulation was passed in September 2010, the regulator Anatel granted MVNO
  • 5. licenses to the insurance company Porto Seguro and the VoIP provider Sermatel Comercio. Both companies have teamed up with second-placed operator TIM, which provides the network infrastructure, and Datora, a mobile-virtual-network enabler (MVNE). More recently, Anatel granted the first pure MVNO license to the MVNE Sisteer. Besides TIM, other network operators are looking with interest at the MVNO model, for example, the market leader Vivo. In March, Vivo announced plans to have at least two MVNO partners by the end of 2012. In order to achieve its objective, the operator created a board for wholesale and MVNO operations and is currently analyzing proposals from around 30 potential partners. The Latin American MVNO market started picking up in the second half of 2011, and the strongest activity was in Colombia and Chile. In February this year, Chilean regulator Subtel received 26 license applications from companies interested in launching MVNO operations. In April, Virgin Mobile Latin America (VMLA) inaugurated its first MVNO in the Andean country, targeting the youth and “youthful” segments with a simple portfolio of prepaid data packages and a small but attractive range of smartphones. Opportunity for MVNO-led pricing arbitration is low MVNOs must find ways to offer attractive data offers – to the right niche and at the right price In traditional MVNO markets, such as Europe, North America and Asia, MVNOs have historically targeted the prepaid market with a low-cost proposition and then tried to attract the more affluent customers. International experience shows that the wholesale business can bring MNOs significantly higher EBITDA margins than retail, by reducing subscriber-acquisition cost (SAC) while only slightly lowering ARPU. Typically, a market with comparatively high or very high prices is more likely to have room for MVNO-led price arbitration. Markets with higher levels of churn also might offer better opportunities for MVNOs because users are more inclined to switch providers (see fig. 3). Fig. 3: Selected countries, blended churn, 3Q10-3Q11 Argentina Brazil Colombia France UK US Mexico 4.0 Fig. 2: Latin America, selected MVNOs' subscriptions, 4Q10-4Q11 Uff Maxcom UNE EPM Telecsa Subscriptions (000s) 250 200 150 100 50 Source: Informa Telecoms & Media 4Q11 3Q11 2Q11 1Q11 4Q10 0 3.5 Churn (%) 3.0 2.5 2.0 3Q11 2Q11 1Q11 4Q10 1.5 3Q10 So far, VMLA is the only international group with plans to launch MVNO operations across the region. In addition to Chile, it plans to launch in Brazil, Colombia, Mexico, Argentina, Peru, Uruguay and Bolivia. Interestingly, Colombia is likely to have eight MVNOs and three MNOs in operation by the end of 2012: In addition to the MVNOs already in operation, retailers Exito and Falabella, and fixed operator Emcali, have also started discussions to find an MNO partner. Source: Informa Telecoms & Media Given their pricing environments and churn trends, Brazil, Mexico and Colombia, and to a lesser extent Argentina, would appear well-suited for additional price competition. In all the markets, the lack of regulation in mobile termination rates (MTRs) and the fact that operators have mostly been left to negotiate MTRs among themselves have resulted in the higher cost of off-net calls. Brazilian rates are also affected by high telecoms-services taxation and, as a result, the country has the highest SMS prices in the region. Promotional activity, primarily the offering of cheap on-net calls, is strong across the region, contributing to sustained high levels of multiple-SIM ownership and churn. © 2012 Informa UK Ltd. All rights reserved. www.informatandm.com 5
  • 6. Fig. 4: Selected operators, EBITDA margin, 3Q11 50 Margin (%) 40 30 20 AT&T (US) Vodafone (UK) Orange (France) Telcel (Mexico) TIM (Brazil) Claro (Brazil) 0 Movistar (Argentina) 10 Source: Informa Telecoms & Media Informa also believes that pricing will be crucial to the success of the higher-value data MVNOs. In addition to the well-known benefits of the MVNO model, higher-value data-focused MVNOs can help provide incremental revenues to offset declining ARPU levels. Finding the correct pricing levels and models, however, is a tough task. As in the case of Virgin Mobile in Latin America, data MVNOs will be eager to add smartphones to their data plans, but without subsidies it can be challenging to meet customer demand for the devices at the right price. At the same time, MVNOs must be able to negotiate good wholesale rates from MNOs for the data they then sell at retail. In the retail market, MNOs are moving away from flat rates and toward models where they charge by actual data consumption, by time or by access to selected apps. MNOs themselves are still struggling to find efficient ways to price data services in the retail market. When it comes time to negotiate wholesale data prices, MVNOs face the risk of remaining stuck with unfavorable conditions, which could ultimately jeopardize their business model. 6 © 2012 Informa UK Ltd. All rights reserved. www.informatandm.com Triple play will remain a major MVNO driver Challenging fixed-line operators and ISPs should exploit the MVNO model to develop more competitive offerings Most of the early Latin American MVNOs have been driven by the opportunity to offer fixed/mobile bundles, especially in the most concentrated markets, such as Mexico and Colombia (see fig. 5). It is not a coincidence that despite the absence of a full regulatory framework, both Movistar in Mexico and Tigo in Colombia have taken advantage of existing rules allowing telecoms services to be resold to build MVNO partnerships with ISPs and cable players. To erode shares of strong competitors in their respective markets, Movistar and Tigo have established MVNOs with fixed operators looking to add value to their bundles of voice, TV and Internet service by including mobility. Movistar was the first to pursue this strategy, when it teamed up with Maxcom at the start of 2008. Similarly, Tigo in Colombia has partnered with ISPs UNE EPM and ETB to offer mobile broadband services to contract customers. For the foreseeable future, Informa expects alternative ISPs, especially in the most unbalanced fixed-line markets, to retain a strong interest in the MVNO model with the aim of increasing customer loyalty Fig. 5: Brazil, Argentina, Colombia, Mexico, market share and concentration, 3Q11 America Movil Telefonica Millicom Telecom Personal Oi Others* 100 90 80 70 60 50 40 30 20 10 0 Telecom Italia Market share (%) Informa, however, believes that for Latin American MNOs the option of teaming up with low-cost MVNOs to bring price competition to other MNOs is not particularly attractive. In the prepaid-dominated Latin American markets, the potential negative impact of low-cost MVNOs on an already flat or declining ARPU is a major concern for MNOs. Latin American MNOs will be more interested in teaming up with MVNOs that, although helping improve EBITDA margins, can also bring additional revenues from unaddressed niches willing to use incremental airtime and data services (see fig. 4). Brazil Argentina Colombia Mexico Concentration: Herfindahl index 0.25 0.32 0.51 0.54 Notes: The Herfindahl index is defined by the sum of the squares of the market shares of all firms in the market, where the market shares are expressed as fractions. An index below 0.01 indicates a highly competitive market. An index below 0.15 indicates an unconcentrated market. An index between 0.15 and 0.25 indicates moderate concentration. An index above 0.25 indicates high concentration. *Nextel, CTBC and Sercomtel In Brazil; Iusacell and Nextel in Mexico; and Nextel in Argentina. Telecom Italia owns 22.9% of Telecom Personal in Argentina. Source: Informa Telecoms & Media
  • 7. and reinforcing their offering by bundling products. With their knowledge of and expertise in the telecoms business, fixed-line players and ISPs remain the most likely candidates to buy into the MVNO model at the early stages of its development. It is no coincidence that the first cable operator to launch an MVNO was Megacable in Mexico and that the challenger fixed-line operator Axtel is also said to be close to launching an MVNO there. The opportunity is comparatively weaker in countries where the broadband market is more competitive, such as Brazil, and the main existing mobile operators can develop converged offers through partnering with their own fixed-line counterparts. In markets like Brazil, it is the nontelecoms companies that are expected to be major players in the MVNO business, starting with retailers and financial institutions. Beyond the “telecoms MVNO”: The retailer, the financial and the youth MVNO Retailers can help MNOs increase loyalty and reduce churn, but negotiations with MNOs will be tough Beyond the “telecoms MVNO” (e.g., an existing fixed-line telecoms player with an MVNO operation), retailers and financial institutions have been and remain among the strongest candidates to become MVNOs in Latin America (see fig. 6). Large and mass-market retailers are already key players in the value chain, since they take Fig. 6: Brazil, companies interested in launching an MVNO Telecoms GVT, Lebara, Virgin Mobile Financial Banco do Brasil, Banco Real Santander, Itau, HSBC Retail Carrefour, Casas Bahia, Pao de Acucar, Walmart Sports Sao Paulo FC, Santos FC, S.E. Palmeiras, Gremio FBPA, Corinthians, CR Vasco de Gama Others Correios, Ipiranga, Globo Sources: Sisteer, Datora, Informa Telecoms & Media the largest slice of handset sales, especially for prepaid users. The combination of a strong brand and a larger and far-reaching retail network are the key benefits retailer MVNOs could offer MNOs. Despite the clear benefits that retailers could bring to MNOs, only a handful of international retailers, such as supermarket chains Tesco in the UK and Aldi in Germany, have launched MVNOs. Retailers are typically focused on volumes, have low EBITDA margins and are used to having strong negotiating and bargaining power with suppliers, factors that can prove to be especially challenging in their negotiations with MNOs. Furthermore, retailers will naturally target the mass market, which for MNOs raises the risk of market-share cannibalization, especially in the prepaid-dominated Latin American markets. Even so, the retailer model does have potential in the region, starting in the geographically larger countries, such as Brazil, Mexico and Argentina, where it is more challenging for MNOs to develop far-reaching retail networks. In addition, retailers can help MNOs increase loyalty and reduce churn by using their customer-loyalty experience to offer discount and loyalty cards and to offer leasing programs for device purchases. As the VAS market develops, the retail MVNO is also in a good position to develop mobile commerce. The m-commerce and m-banking opportunity, alongside the retail network, is at the core of the potential value proposition of the financial MVNO. The opportunity for this type of MVNO varies across Latin America, depending on the level of maturity of each market. There is certainly scope in the region for prospective ethnic MVNOs, targeting communities of migrants and nationals with family or friends living abroad to provide financial services. Given the reach and needs of the Latin American diaspora in Europe and North America, the long-distance market offers a good opportunity to add mobile-money value-added services (VAS), such as international credit transfers, to voice services. Overall, banking penetration remains on average lower than mobile penetration, and telecoms and financial regulators are starting to develop rules for the provision of mobile-money VAS to those both with and without bank accounts. A number of providers of financial services have already launched m-banking platforms and could be interested in the MVNO model. Since smartphone penetration remains about 10% regionally, the MVNO opportunity is initially expected to be limited mainly to © 2012 Informa UK Ltd. All rights reserved. www.informatandm.com 7
  • 8. 30 25 20 15 10 5 Eastern Europe Southern Europe Northern Europe Eastern Europe North America 0 South America addressable market for youth MVNOs will depend on the income levels and local competitive dynamics in each country. In the case of Virgin Mobile Latin America, for example, the flexibility of pricing models will determine the real size of the youth segment addressable in countries as different as Chile and Bolivia, especially when MVNOs 35 Central America Regardless of market-structure barriers to MVNOs, given the current demographic trends, Informa believes that those MVNOs targeting the youth segment have a larger addressable market in Latin America than in Europe and North America (see fig. 7). Nonetheless, the size of the Fig. 7: Global, estimates of under-15 population percentage, end-2010 Caribbean The financial MVNO, however, faces the same challenges as the retailer MVNO in terms of negotiations with MNOs, given its natural focus on the mass market. In addition, operators are increasingly eager to play a role in the m-commerce and m-banking markets. The way regulation develops in this area will largely determine the development of this MVNO model. plan to offer unsubsidized devices. The strength of the opportunity for the youth MVNO will also vary depending on other factors, such as changing regulation. For example, with Brazil planning to cut taxes for tablets manufactured in the country, there might be an opportunity for data-focused MVNOs targeting the devices to the youth segment. Under-15 population (%) offering voice and basic SMS-enabled financial services for low-end and feature phones, but as smartphone prices decline, more sophisticated services will appear. Source: UN The MVNO quadrant: Global and regional case studies The viability of MVNOs depends on local market conditions – and on the will and ability of operators to reach out to niches of customers with highly relevant services. Informa presents a selection of mini case studies of international and regional companies that have succeeded with the MVNO model. The incumbent MNO Orange, France ICE, Costa Rica Orange, part of the France Telecom Group, supports several MVNOs in France, its home market, including: Before the mobile market was liberalized in late 2011, state-owned ICE launched two MVNOs to preempt moves by new competitors Claro and Movistar. ICE partners with well-established Costa Rican companies to reinforce its role and image as a key asset for the country. ICE’s network currently supports two MVNOs, both with 45,000 subscribers as of April 2011: • Fullmovil is owned by Grupo Virtualis, a consortium formed by consumer electronics, household appliance and furniture retailers Grupo Monge and Casa Blanca. • Tuyo Movil is owned by national TV station Teletica. The first MVNO to launch in Costa Rica, it has achieved positive results in both quality and customer experience. • Virgin Mobile, which recently incorporated two quad-play offerings and is regarded as one of the most thriving full MVNOs globally. Its subscriptions totaled more than 2 million at the end of 2011. • The M6 MVNO of Metropole Television, the third most-watched TV network in the country. • NRJ Mobile, a 90/10 joint venture between banking corporation Credit Mutuel-CIC and multimedia group NRJ. Like Virgin Mobile, NRJ targets the youth segment. It had 900,000 subscribers at the end of 2011. 8 © 2012 Informa UK Ltd. All rights reserved. www.informatandm.com
  • 9. The challenger MNO E-Plus, Germany Movistar, Mexico German operator E-Plus has been owned by Dutch telecommunications operator KPN since 2002. E-Plus’ network enables a range of affiliated MVNOs, including pan-European MVNO Simyo, which is also present in Belgium, France, the Netherlands and Spain, and supermarket retail MVNO Aldi Talk, both leading the no-frills prepaid German market. E-Plus also enables ethnic MVNO Ay Yildiz, targeted at the large Turkish expat community, as well as blau.de, MedionMobile, MyMTVMobile and Base. Its advanced and diversified MVNO strategy has been instrumental in allowing E-Plus to maintain its market share at just under 20%, making it the third-largest operator in Germany. Telefonica in Mexico was one of the Latin American pioneers in the MVNO space, hosting one of the first regional MVNOs, by fixed-line operator Maxcom, back in 2008. In recent quarters, Telefonica has consolidated its MVNO strategy. In July 2011, Megacable launched Megacel on Movistar’s network with the plan of targeting existing fixed-line clients by offering multiple SIMs to family households at preferential rates. At the end of 2011, Movistar was announced as the MNO partner for Virgin Mobile in Mexico. As a challenger operator in a market where America Movil has a dominant presence, MVNO enablement has become an important strategic tool for Movistar in an effort to gain market share. The MVNO Poste Mobile, Italy Uff, Colombia Poste Mobile, the MVNO of national postal service Poste Italiane, is the most significant player in the Italian MVNO market, with various voice and data offers, mobile phone deals and a large distribution network. It offers a host of VAS, primarily m-banking and m-payment, such as airtime remittances, coupon click-to-buy and m-insurance. Poste Mobile recently launched the Zero Pensieri Infinito service plan, which includes unlimited voice calls and SMS messages to all national destinations plus 1GB of data for a monthly fee of €34 (US$44). Poste Mobile is also a rare example of an MVNO marketing services specifically to business customers. Hosted on the network of second-placed Vodafone, it has more than 2 million subscriptions. Uff was launched in late 2010 by TV network RCN Television, a unit of media conglomerate Ardila Lulle group. Uff has a no-frills business model based on offering cheap long-distance calls to the main countries where the Colombian diaspora lives. Hosted on Tigo’s network, Uff rapidly added 50,000 subscriptions in its first two months, reaching a total of 250,000 subscriptions by the end of 2011 and becoming the first sizable MVNO in Latin America. From launch, the MVNO has evolved its service proposition by adding two prepaid data plans and two BlackBerry plans. Through a strategic agreement with Nokia, it also offers the “Pack Listo Uff” plan, including a Nokia C3 device with unlimited data. The MVNE Teleena, Netherlands/UK Datora Telecom, Brazil Teleena is a mobile virtual network enabler (MVNE) based in the Netherlands and the UK that provides an array of services on a wholesale basis to MVNOs and corporate customers, including low-cost roaming and converged fixed/mobile applications. The company is focused on enabling MVNOs to differentiate themselves through offering VAS. Teleena owns and operates its own BSS/OSS and an all-IP mobile core network, which is connected to Vodafone’s radio access network in the Netherlands. In Europe, Teleena has a partnership with Vodafone in the UK and the Netherlands, where it hosts over a dozen MVNOs. Datora was the first telecoms company to apply for an MVNO license from telecoms regulator Anatel in Brazil. This license enabled Datora to become the first MVNO aggregator (MVNA) in the country. The company has international expertise in both connecting operators using VoIP and infrastructure management. It is currently enabling the country’s second-placed MNO, TIM Brasil, and insurance company Porto Seguro to launch the first MVNO in Brazil. Datora has also signed an agreement with Virgin Mobile to launch operations in the country. The company has a strong focus on the machine-to-machine (M2M) opportunity in Latin America. © 2012 Informa UK Ltd. All rights reserved. www.informatandm.com 9
  • 10. Global MVNO survey Respondents: 145 Respondent company types: MVNOs, MVNEs, MNO wholesalers, IT and telecoms vendors Date: March-April 2011 Which MVNO types offer the biggest growth potential? (Choose two) "Ethnic and retail segments are still big, but new segments are emerging" 35 30 25 20 15 10 Enterprise Telecoms discount Device/machineto-machine Retail/brand extender Social networks 0 Youth/media and entertainment 5 Ethnic/international Share of respondents (%) 40 What are the top business challenges for MVNOs? (Choose two) "The MVNO target market will remain price-sensitive; diversification might be needed" • MVNOs will focus more on customer-experience management. • Data connectivity will enable diversification in products and services. • But price pressure will remain challenging. 40 30 20 10 © 2012 Informa UK Ltd. All rights reserved. www.informatandm.com Wholesale-contract terms Device management Billing and cash management Retail distribution Customer segmentation Technology management 0 Service diversification 10 Price competition Share of respondents (%) 50
  • 11. Which non-telecoms industries could benefit from MVNO services? (Choose two) "The MVNO business model will support vertical sectors’ core business" • Media and entertainment companies could benefit from the MVNO business model. • The financial-services industry is emerging as a sector that could benefit from MVNOs. • Connected-device firms and social networks are also potential beneficiaries. 50 40 30 20 Other Social networks Financial services Media and entertainment 0 Automotive 10 Consumer electronics Share of respondents (%) 60 Which service features could improve MVNO offerings? (Choose two) "An explosion of data offerings is imminent" • Three main developments are expected, all customer-centric: °° Customer loyalty °° Data °° Financial services. 30 20 Loyalty programs Mobile advertising Dynamic pricing Social CRM/self care Cloud-based apps (telephony, messaging, backup) Mobile broadband 0 International roaming 10 Financial (remittances, payment and transfers) Share of respondents (%) 40 © 2012 Informa UK Ltd. All rights reserved. www.informatandm.com 11
  • 12. ABOUT INFORMA TELECOMS & MEDIA Informa Telecoms & Media is the leading provider of business intelligence and strategic marketing solutions to global telecoms and media markets. Driven by constant first-hand contact with the industry, our 65 analysts and researchers produce a range of intelligence services including news and analytical products, in-depth market reports and datasets focused on technology, strategy and content. For more details on Informa Telecoms & Media and how we can help your company identify future trends and opportunities, please contact: Marco Esposito Informa Telecoms & Media Direct: +44 (0) 207 017 5853 Mobile: +44 (0) 7884 400 999 Email: marco.esposito@informa.com 24/7 access to business-critical insight, analysis and data www.informatandm.com/ic Cutting edge information on all fixed line, cable and broadband markets www.informatandm.com/wbis Keeping the world’s leading cellular organisations better informed www.informatandm.com/wcis connect Join us on LinkedIn: www.informatm.com/linkedin Follow us on Twitter: www.twitter.com/informatm © 2012 Informa UK Ltd. All rights reserved. www.informatandm.com Email us: marketing.enquiries@informa.com Subscribe to our Connect email www.informatm.com/connect 1