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Comarch 2009

Becoming an MVNO / MVNEIdentifying new business opportunities

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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); these segments require specific offerings with many value-added services and add-ons for the service to be found attractive by potential customers

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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!

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The MVNO value matrix

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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

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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

• the 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

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Possible deployment models for an MVNO solution

• 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 data centers)

• 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

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

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Possible deployment models for an MVNO solution

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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)

• regulators 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)

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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 parties

• 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 costs on marketing, customer acquisition and maintenance, handset subsidies

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An MNO-MVNO cooperation model

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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.

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Comarch solution for MVNOs – basic facts

• References

(Single MVNO model) (MVNO aggregator model)

• Comarch can offer you a one-vendor, pre-integrated and preconfigured solution

• We can provide a complete MVNO and / or MVNE platform

• Learn more: http://mvno.comarch.com