mvno strategies in telecommunications industry

7/29/2019 MVNO Strategies in Telecommunications Industry

1/18


2/18

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


3/18

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


4/18

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.


5/18


6/18

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


7/18

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


8/18

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


9/18

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


10/18


11/18

MVNO business strategies can be divided into five maingroups:


12/18

From the case studies,

Understanding:

MVNOs can gain competitive

advantage through

Competition on basis of

price

Service differentiation


13/18

Two Basic types:

Reseller MVNO Model

Full MVNO Model


14/18

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).


15/18

A Full MVNO will maintain

Core network and service

platforms

Own International MobileSubscriber Identity (IMSI) codes

(SIM) cards


16/18

The MNO Perspective


17/18

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


18/18

mvno strategies in telecommunications industry

Documents