Posted on 02/04/2013
Becoming a Mobile Virtual Network Operator (MVNO) can be a gamble, according to distributor Nimans. Head of Networks, Mark Curtis-Wood says success or failure often hinges on brand strength and individual credibility.
“For me the key challenges in the MVNO space for a reseller is credibility and brand awareness. Whilst it may sound like a great idea to have your own SIM card and perceived network service, end users won’t always know who you are. If you are a reseller trying to sell connections that have your distributor’s name all over it, that can be difficult. This is the first obstacle you are going to have to overcome even before you enter the sales cycle. There needs to be trust and confidence.”
He continued: “Embracing MVNO is a risky strategy. For the right resellers with the right customers the appeal can be overwhelming, enhancing loyalty and market strength and delivering more control and freedom. But in the wrong hands resellers could be creating a big obstacle they would be best to avoid, before the sales process has even begun.
“For me, where an MVNO works really well is where you have a strong retail brand to leverage. Tesco and Asda are two examples. They work well where you are trying to drive your own credibility and brand into the marketplace. But the challenge for most resellers is if their brand isn’t strong enough they are unlikely to get past first base.
“Ultimately a reseller is relying on the same networks that are out there. There’s two distinct challenges for the MVNO market. In the retail space it’s becoming increasingly crowded and very competitive in terms of pricing, driving down margins that then require high volumes to make it viable. In the reseller space you have a distinct disadvantage about having to overcome whose name is on the Sim card. If your brand is strong enough it’s a good decision but if it’s not then it may be better to look at a wholesale service provider route where you are actually selling a known network on your own bill. This enables you to sell your value as a reseller in conjunction with the credibility of a network through a trusted supplier.”