Think Carefully Before Becoming An MVNO
Posted on 15/07/2014
Becoming an MVNO is a tricky decision that needs careful consideration according to Mark Curtis-Wood, Head of Network Services at Nimans.
“The core benefits of becoming an MVNO really come to the fore when you’ve got a brand that’s big enough to be recognised in the market, or if some significant brand awareness is required,” he explained.
“If you are a big retailer or brand such as Tesco or Asda then it makes sense to become an MVNO but if you are just ABC Telecom on the high street then it’s a completely different scenario; you lose the power of the network by rebranding and going it alone.
“Equally it has an impact on a reseller’s business model as effectively it’s a wholesale agreement so the contact responsibility is with the reseller. If they are not used to selling in a wholesale environment it can be difficult as they have to deal with everything….CDR’s, billing, first line support and developing tariffs which in most cases come as ‘raw data’ from a network. You need the capability and capacity to do it. The initial consideration is assessing if their brand is strong enough in the first place.”
Curtis-Wood emphasised: “My advice would be to think carefully before doing it because the danger is that another barrier to a sale is being put in place. The first thing you have to do with a prospective customer is explain who the network is because they are unlikely to have heard of it. When you’re selling O2 for example you don’t have to explain who they are. Obviously resellers have strong relationships with their customers but they will still need reassurance that their own branded network is credible and reliable. People don’t question the major networks, they are generally trusted today.
“Think very carefully about what you are trying to achieve. If ultimately you are trying to own the customer, for me there are better ways of achieving this through a straightforward wholesale service provider relationship.”
He concluded: “Here at Nimans, we don’t have an MVNO strategy because whilst Nimans is a very strong brand in the channel we feel the benefit of selling the network brand (O2) to the end customer (via a reseller on a wholesale white label basis) is a much stronger message.”