mvno strategies in telecommunications industry
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7/29/2019 MVNO Strategies in Telecommunications Industry
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Founded in 1999
STAKEHOLDERS: Maxis Communications(74%)
Apollo Hospital (26%)
Headquartered at Gurgaon
Business Delivery Innovation award 2010 at fourthGlobal Telecom Business Innovation Awards held at
London (UK).
Indias 5th largest GSM
Mobile service
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OBJECTIVE
Secondary Research on MVNOs
MVNO models currently in Europe and US
MVNO Technical Characteristics
MVNO Regulation in India
Strategies adopted globally
Duration: 45 days
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A Mobile Virtual Network Operator (MVNO) is a mobile
operator that does not own its own spectrum and usuallydoes not have its own network infrastructure
An MVNO is a business model that emerges when the
traditional mobile value chain is ruptured.
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Total MVNO market3% of Total Mobile Market
Currently, over 400 active MVNOs operated by over 360companies
Western Europe 40% of the worldwide MVNOs,Netherlands and Belgium represents the highest share
Hong Kong - highest MVNO penetrated Asian market with7,20,000 customers, i.e. around 7.5% market penetration
Govt. of India recently accepted TRAI's proposal for theentry of MVNOs in the domestic market
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Fifth-largest telecom network in the world; second largest
among the emerging economies after China
The large untapped potential in Indias rural markets
The immense potential for 3G, reflected by the 30-40 per centannual growth in VAS in other countries
Youth segment 50% of Indias population
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Regulatory Position Examples Relevant Regulations Number of MVNOs
Force MNOs to sharenetwork
1) Hong Kong2) Norway
Example network: HongKong
1) 40% network capacity
dedicated to MVNOs
2) No limit to number of
MVNO licenses
3) Uniform wholesale
pricing regardless of
MVNO
1) Hong Kong: 72) Norway: 8
Facilitate launch of
MVNOs
1) Australia
2) Belgium
3) France
4) Denmark
5) UK
Example Market: Australia
1) Mandatory sharing of
networks enforced on
operators with
significant market share
2) Wholesale pricing on a
cost plus basis with
regulated margins
1) Australia : 20
2) Belgium : 15
3) France : 17
4) Denmark : 11
5) UK : 18
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Regulatory Position Examples Relevant Regulations Number of MVNOs
Indifferent to MVNOs 1) Austria2) Canada
3) Japan
4) Portugal
Example Market: Japan1) No requirement on MNOs to
open networks to MVNOs
2) MNOs allowed to price
discriminate based on its
own business objectives
1) Austria : 42) Canada : 5
3) Japan : 2
4) Portugal : 2
Discourage development
of MVNOs
1) Bolivia
2) Argentina
Example Market: Argentina
1) Large number of MNO
licenses granted to make
market unattractive for
MVNOs
2) Stringent roll out obligations
to MNOs make MVNO entry
difficult
1) Bolivia : 1
2) Argentina : 0
Prohibit MVNO 1) Greece
2) Italy
Example Market : Italy
1) MNO not allowed to host
MVNO till 2011 as part of 3G
license agreements
1) Greece : 0
2) Italy : 0
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MVNO business strategies can be divided into five maingroups:
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From the case studies,
Understanding:
MVNOs can gain competitive
advantage through
Competition on basis of
price
Service differentiation
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Two Basic types:
Reseller MVNO Model
Full MVNO Model
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Customer interface
Leveraging customerrelationships
Strong brand
Sales and distributionchannels
The main advantage of the Reseller approach is that market entry isrelatively straightforward because the model is simple to implementand attractive to network partners (that is the host MNO).
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A Full MVNO will maintain
Core network and service
platforms
Own International MobileSubscriber Identity (IMSI) codes
(SIM) cards
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The MNO Perspective
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The factors which are driving MVNO success stories globally:
Maturity of the telecom market in respective country (based onteledensity)
Existence of Mobile Number Portability (MNP)
Existence of 3G services
Consolidation of the telecom market
Current charges of services for the end-user
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