This presentation is about a recent development in the markets of the big telcos and the big internet players: Communication service providers and social networks are about to merge. A new class of business is evolving - community communication service providers. Or communication communities. Such as Facebook and Skype, Google+ and GoogleVoice.

1. Community Communications
The next Over-The-Top generation of services and
what has this to do with the old-fashioned term MVNO.
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2. Trends in a converging Industry called ICT
co2
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3. OTT services challenge Telco providers in their core business
IMS Research: Service revenues in the OTT market will grow at an average
rate of 32% through 2016, reaching $16.4 billion.
WhatsApp
à Free online messaging, voice and video calling services are digging into
classic revenue streams of telco providers.
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4. What does OTT – Over-The-Top – really mean?
Definition of the expression “Over-The-Top”:
• Surpassing a goal or quota.
• Excessively expressive or dramatic.
• Over the breastwork, as an attack in trench warfare.
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5. What happened to the MVNO Market?
• On July 1, 1991, Finnish Prime Minister Harri Holkeri made the
world's first GSM call.
• In 1999, Virgin starts operating the first full MVNO in the UK,
after regulatory approval in 1998. Nokia 101
(1992)
• In 2011, about 500-600 MVNOs are active around the world.
• By 2015, Informa predicts 186 million MVNO subscribers.
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6. What is a Mobile Virtual Network Operator?
• „MVNO“ in a wider sense is used as an umbrella term for providers of mobile telephony
services, without own radio spectrum, and without own radio network, but with different
levels of technical and process integration.
Enhanced Network (Full) Mobile
Classic Service Service Mobile Virtual Network
Dealer / Branded Sales Data Service Service Provider / Provider Network Operator
Reseller Partner Provider Provider (ISP) (ESP) (NSP) (MVNO) (MNO)
Radio
License & ✔
Network
Number
✔ ✔
Ranges
Core Network ✔ ✔ ✔
Services /
✔ ✔ ✔ ✔
VAS
Customer
✔ ✔ ✔ ✔ ✔
Care
Billing,
✔ ✔ ✔ ✔ ✔ ✔
Pricing
Branding and
✔ ✔ ✔ ✔ ✔ ✔ ✔
Advertising
Sales &
✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
Distribution
MVNO in a wider sense
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7. What is “White Label”?
White Labeling, or branded reselling is a Multi Channel Marketing Strategy.
• Origins of the term “White Label”:
• A white label record is a vinyl record with a white, non-branded
label, produced to test market response of the recorded music.
• Classic markets for white label products:
• Retail – e.g. ALDI with its own brands for food, detergents, apparel
• Household Appliances & Electronics – washing machines, TV-sets, radios…
• Credit Cards – Visa and Master card co-branding with Lufthansa, Amazon, etc.
…
• More recent markets for white label products:
• Mobile Phones – e.g. BenQ manufacturing mobile phones for several
large international brands, or VERTU (built by Nokia)
• SaaS Internet services, like white label Social Media Solutions
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8. White Label Definition
• A product or service, where the provider of the service purchases a
fully supported product from another source, then applies its own
brand and identity to it, and sells it as its own product.
• The purchaser assumes the seller is selling its own product.
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9. Reasons for a White Label Strategy
• Market testing / moving into new markets
• Testing without disclosing the brand name or localization of brand
• Plant utilization / scaling the business
• Optimize cost driven commodity production by maximizing factory utilization
• Destroy your own business / in-house competition / diversification
• Increase overall market share and create a challenge for own brands
• Value chain split
• Companies focusing on their core skill – production versus sales/marketing
• Market niche positioning / creating new product / service bundles
• Companies addressing clearly defined market niches with a different message
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10. White Label Social Media Solutions
• With the internet, mass market B2C
Forrester WaveTM: Community
services became possible.
Platforms, Q1’09
• A new category of services was
created: Internet Portals, like
CompuServe, AOL, T-Online, Yahoo!,
Ning
or Google.
• As a result, every major consumer
brand developed their own “portal”.
• Today, social networking sites have
taken the lead.
• facebook, Xing, LinkedIn, mySpace
have been outpacing the classic
portals.
• Social Media Solutions are offered as
SaaS white lable service.
Source: Forrester Reserach, 2009
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11. Gartner Hype Cycle
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12. Social Network Subscriber Numbers
• > 600 million members
• > 100 million members
• > 1 million user accounts
• > 800 million user accounts
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13. The Creation of Over The Top Value Chains
co2 - community communication services are emerging
• Major players are joining forces and driving the convergence of value
chains including Social Networks and Communication Services,
creating integrated OTT co2 platforms.
• All of them have in common:
• millions of registered users
• international reach
• cloud based services
• messaging features
• (video) calling functionality
• Some offer:
• outbound to classic telephony
• inbound from classic telephony
• close interaction with carriers for inbound/outbound termination
• close cooperation with mobile or fixed line network operators in terms of revenue share models
• rumor: dynamic carrier selection (free choice of mobile operator) granting independence of MNOs
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14. World Mobile Market Saturation
Fixed
and
Mobile
Telephone
Lines
per
100
Inhabitants,
2000-­‐2010*
90
Mobile
80
76,2
Fixed
Line
70
60
Per
100
inhabitants
50
40
30
20
17,27
10
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010*
*Es@mates
The
developed/developing
country
classifica@ons
are
based
on
the
UN
M49,
see:
hNp://www.itu.int/ITU-­‐D/ict/defini@ons/regions/index.html
Source:
ITU
World
Telecommunica@on
/ICT
Indicators
database
• 90% of the world population have access to mobile phone services
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15. MNOs are on a Dead-End Street
Comparison between Mobile Operators and Social Networks:
• International Brands
• B2C markets targeting millions of customers
• Core product is a commodity
• Stable platforms with established processes
• MNOs have a high technical complexity and difficult processes
• MNOs have high infrastructure cost and scalability issues
• MNOs have an old industry attitude: they are slow and self-focused
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16. Solution Scenario: Splitting up the Value Chain
• The Discipline of Market Leaders: Choose Your Customers, Narrow
Your Focus, Dominate Your Market by Michael Treacy andFred Wiersema
a) Product Leadership
b) Customer Intimacy
c) Operational Excellence
Technology Processes CRM Services … …
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17. MVNO Market Share Forecast
250
Millionen
Subscribers
MVNO
Share
of
Wireless
Market,
2003-­‐2015
14
W.Europe
&
N.
America
World
Average
12
200
10
Per
100
inhabitants
150
8
6
100
4
50
2
0
0
2003
2004
2005
2006
2007
2008
2009
2010
2011*
2012*
2013*
2014*
2015*
*Estimates
Source: PYRAMID RESEARCH, Telegeography
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18. MVNO Classifications
Roaming Cost
Business LifeStyle
Improvement
Social
Retail Brand Discount
Network
Ethnic
Fixed / Mobile
Convergence
?
The Missing
MVNO Class
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19. MVNO Operating Models
Self-Operated MVNE MVNA
MVNO
MVNO
MVNO
Sales & Distribution Sales & Distribution Sales & Distribution
Branding & Branding & Branding &
Advertising Advertising Advertising
Billing Pricing Billing Pricing Billing Pricing
Customer Care Customer Care Customer Care
MVNA
VAS VAS VAS
MVNE
IN, HLR, SMSC IN, HLR, SMSC IN, HLR, SMSC
Number Ranges Number Ranges Number Ranges
MNO
MNO
MNO
Radio Access, Voice, Radio Access, Voice, Radio Access, Voice,
Data, SMS Data, SMS Data, SMS
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20. Thread: Apple Dynamic Carrier Selection
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21. The Issue of Sitting at the Bottom End without Realizing it
Value Added Services
Communication Services
Customer Accounts
Access
for Voice, Data, Messaging
(National, International,
MNO MNO MNO
Roaming)
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22. The Black Swan Theory by Nassim Nicholas Taleb
• The Black Swan Theory or Theory of Black Swan Events is a
metaphor that encapsulates the concept that The event is a surprise
(to the observer) and has a major impact.
• After the Black Swan appeared, the event is rationalized by hindsight.
Source: Wikipedia
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23. UC / UM
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24. Wrap-Up
• Commoditization will continue putting pressure on the MNOs.
• Saturated markets do require differentiation of target groups.
• In this case White Label is an established marketing strategy.
• The MVNO market essentially is a classic White Label market.
• There is need for access. Do what you do well and do it better.
• Sun Tzu: Know your enemies. If you can’t beat them, join them.
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25. Conclusion: MVNOs are OTT service providers!
A MVNO is a mobile communications service provider,
which is purchasing a White Label mobile telephony service
from a Mobile Network Operator,
which may be enriching such services with their own Value Added
Services (VAS),
and which is selling such syndicated mobile services under their own
brand to their specific target market segment.
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26. Contact
André Panné
Managing Director
TRADUM UG (haftungsbeschränkt)
Schönstrasse 65-B
81543 Munich
Germany
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