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Innovation Services

Mobile Virtual Network Operator


Mobile Virtual Network Enabler

Strategy and Marketing


Strategy and Marketing

Whats it all about?


Seemingly saturated markets, increasing competi- the new entrant to focus on the really critical, market-
tion and higher end-user expectations with regard to side success factors. As there is no need for a spec-
quality-of-service (QoS) and innovation along with trum licence, a lengthy, complex and expensive radio
greater sophistication and heterogeneity/diversity in network roll-out, or ongoing maintenance of the latter,
terms of end-user service and content demand are market entry barriers are much lower than for a full
the current market challenges facing todays operators. mobile network operator (MNO).
While experiencing cost pressures, ever-increasing
technological complexity and shortage of skills and On the other side of the coin, dependency on external,
resources, they need to identify new ways of real differ- potentially competing, parties increases, thus necessi-
entiation and unique value proposition, outperforming tating complex contractual agreements and governance
their competitors on time-to-market. models. Infrastructure and services suppliers are
working on Mobile Virtual Network Enabler (MVNE) of-
Currently, the telco business paradigm is shifting away ferings, intended to make optimal use of a host mobile
from full vertical integration of the operators value network operators (host MNOs) spare capacity, while
chain towards a higher degree of specialization. Spe- simultaneously providing sound governance models to
cialists, turning away from mere coverage and capac- the MVNO.
ity provision and focusing solely on end-user service
development, content, branding, marketing and sales, In our MVNO consulting package, we advise our
are emerging. The latter are often companies with a clients on the strategic, technical and commercial
strong brand and consumer focus against a media or implications of the MVNO business model, create all
content background. necessary blueprints, support them in negotiating
fair terms and conditions with a host MNO, as well as
The Mobile Virtual Network Operator (MVNO) concept accompanying them through the implementation and
is a very attractive option for such a specialist, commercial launch. With respect to suppliers, we pro-
aiming at drastically reducing the required resources vide advice on how to successfully implement MVNE
(investment, headcount and roll-out time) and allowing business models.

Radio Network Inter- Applications & Customer Billing & Handset Marketing &
MNO
Access Routing connection Services Care Collection Management Sales

Full Radio Network Inter- Applications & Customer Billing & Handset Marketing &
MVNO Access Routing connection Services Care Collection Management Sales

Light Radio Network Inter- Applications & Customer Billing & Handset Marketing &
MVNO

MVNO Access Routing connection Services Care Collection Management Sales

Second Radio Network Inter- Applications & Customer Billing & Handset Marketing &
Brand Access Routing connection Services Care Collection Management Sales

Branded Radio Network Inter- Applications & Customer Billing & Handset Marketing &
Reseller Access Routing connection Services Care Collection Management Sales

Host MNO value added MVNO value added

Variants of the MVNO business model


Innovation Services

MVNO Concept
An MVNO provides mobile services to end-users For an MNO, opening its mobile network to MVNOs
without owning its own frequency spectrum, a radio makes sense if:
access network (RAN) and backhaul network, as it
buys such capacity from a host MNO. The MVNO may the MNO subscriber growth is limited due to mar-
or may not own core network assets such as home ket saturation, or market share is stale/decreasing;
location register (HLR), mobile switching centre (MSC)
and gateway GPRS support node (GGSN) but its the MVNO addresses market segments that are
essential network assets are a service delivery platform currently underpenetrated by the MNO (or not
and a business support system (BSS) for customer re- addressed at all);
lationship management (CRM) and billing. The degree
of freedom available to the MVNO to differentiate itself the MVNO succeeds in addressing market seg-
via innovative services and pricing depends on the ments at lower cost than the MNO;
breadth of the core network platform it operates and
the agreements contracted with the host MNO. the MVNO does not compete on low price, but
instead on content or brand;
Also commonly handled within the MVNO framework
are second brands of incumbent MNOs and brand- the MNO churn rate is high, so it is preferred that
ed resellers that resell an MNOs products and serv- customers leave to go to an MVNO partner rather
ices under their own brand and are essentially a spe- than another MNO (as the host MNO would still
cialized marketing and sales channel. carry the traffic);

Market maturity and diverse customer needs make the a large amount of capacity is available in the radio
MVNO a very promising concept. The value of MVNOs access network (e.g. market-follower MNO).
to host-MNOs stems from:
Analyst consensus is that MVNOs are likely to grab
the strength of their brand and marketing; 10% to 20% market share in the long run. From an
individual MVNOs point of view, success depends on
their innovative sales channels and distribution the quality of the relationship or interface between the
network; MVNO and the host MNO under strategic and opera-
tional, commercial and technical, contractual and
their market intelligence contributing towards iden- human aspects:
tifying and serving the fifty to a few hundred customer
segments known to todays sophisticated markets The MVNO management team must have a clear
and their ability to target specific customer segments focus and expertise on and in service and content
at a lower cost than the incumbent MNO. creation, branding, marketing and sales.

MVNOs strategically position themselves firstly as ei- The MVNO should follow a strategy and emphasize
ther offering differentiated services, bundles, conven- strengths that complement the MNO core business
ience and service excellence or providing no frills rather than attempting a frontal attack.
basic voice service as a value proposition and, second-
ly, as either serving the mass market or a niche market The MNO network strategy must be consistent with
(e.g. minorities) as their target market. the MVNO product offering (e.g. coverage, high
quality-of-service levels, broadband features).

A robust change management mechanism must


be established with the MNO, including price and
network services adjustments in particular; it is
Strategy and Marketing

essential to buy bulk capacity at a reasonable price ture and services supplier, we have ample experience
and have a mechanism for dynamic price and with regard to all strategic and operational aspects of
volume adjustments. various MVNO business models and cover all func-
tional areas ranging from technology, via network
A comprehensive contractual framework has to be architecture/operations and process/interface design to
put in place, covering not only service rendered the commercial and contractual topics governing the
and pricing, but also such details as end-user relationship between MVNO and host MNO.
ownership and exit terms.
We employ a modular three-phase approach, the start
The personal relationship between the various of each phase being determined by successful comple-
hierarchical levels of MNO and MVNO staff is of tion of one of the following project milestones:
paramount importance.
Kick-off workshop:
The capability of sourcing mobile handsets at This multiple-day session is intended to create a
competitive conditions is an important feature in common understanding about the MVNO concept
many markets (where handsets are sold and subsi- and the available options, as well as the respective
dized via operators sales channels), a partner for pros and cons, with the client, in order to enter
handset sourcing may therefore be needed. the conceptual strategy and business plan blue-
printing phase.

Our Approach Go/no-go decision:


Managements decision to further pursue the
By drawing on the resources of a team that pioneered MVNO project, after reviewing its strategic options,
the MVNE business concept at a leading infrastruc- financial projections and risks, is a prerequisite for

Host MNO MVNO


Operation, Administration and Maintenance Operation, Administration and Maintenance Customer Relationship Management
(OAM) (OAM) (CRM)

Fulfillment
Host
MVNO
MNO
Provisioning
HLR HLR Info Music Video Game ...

Content Platform Billing SIM Card


Management

MSC MSC MSC


Service Delivery Platform (SDP)
Handset
RAN GMSC GMSC Management
VMSC SMSC MMSC ...

SGSN GGSN GGSN

Glossary
GGSN Gateway GPRS Support Node
GMSC Gateway Mobile Switching Centre
GPRS General Packet Radio Service
HLR Home Location Register
Firewall Firewall
MMSC Multimedia Messaging Service Centre
MSC Mobile Switching Centre
PLMN Public Land Mobile Network
PSTN Public Switched Telephone Network
RAN Radio Access Network
SGSN Serving GPRS Support Node
PSTN PLMN Internet Internet PLMN PSTN SMSC Short Message Service Centre
Host MNO Points of Interface (POI) MVNO Points of Interface (POI) VMSC Voice Mail Service Centre

Our architectural blueprint for a full MVNO


Innovation Services

entering phase two, where the platform is designed constraints are also considered. International MVNO
in detail, sourcing requirements and criteria are case studies from our knowledge base can be used
defined, and suppliers offers are solicited and to illustrate the key concepts. Upfront contacts with
evaluated. the addressable MNOs in the market help to pre-
assess the potentials of a host MNO agreement.
Buy decision: We present alternative market entry strategies, as
The buy decisions leads to contract signature with well as the technical and operational MVNO solu-
the suppliers and triggers the third and final phase tions available to our clients, to help them make the
of implementation and launch. right decision at an early stage.

Commercial launch: Finally, blueprints are created for all functional


The commercial launch marks the end of our areas: draft business plan, risk assessment, sales/
involvement, as our client turns to steady-state distribution concept, network architecture concept,
MVNO operations. operations concept, sourcing concept, content busi-
ness concept and key requirement specifications.
The three modules, as presented in our graphical
MVNO consulting package overview, are described Platform Design and Supplier Selection Module:
below in more detail. Using the concepts and requirement specifications
from the blueprinting phase, supplier offers are
Strategy and Business Plan Module: solicited and evaluated. This comprises RfI, RfP and
This module comprises a feasibility study, taking RfQ support.
into account the competitive environment and
market forecasts, as well as the strengths and Partner selection with regard to the host MNO in-
weaknesses of the prospective MVNO. Regulatory cludes contract negotiation support and is paralleled

Host MNO MVNO


Operation, Administration and Maintenance Operation, Administration and Maintenance Customer Relationship Management
(OAM) (OAM) (CRM)

Fulfillment
Host
MVNO
MNO
Provisioning
HLR HLR Info Music Video Game ...

Content Platform Billing SIM Card


Management

MSC MSC MSC


Service Delivery Platform (SDP)
Handset
RAN GMSC GMSC Management
VMSC SMSC MMSC ...

SGSN GGSN GGSN

Glossary
GGSN Gateway GPRS Support Node
GMSC Gateway Mobile Switching Centre
GPRS General Packet Radio Service
HLR Home Location Register
Firewall Firewall
MMSC Multimedia Messaging Service Centre
MSC Mobile Switching Centre
PLMN Public Land Mobile Network
PSTN Public Switched Telephone Network
RAN Radio Access Network
SGSN Serving GPRS Support Node
PSTN PLMN Internet Internet PLMN PSTN SMSC Short Message Service Centre
Host MNO Points of Interface (POI) MVNO Points of Interface (POI) VMSC Voice Mail Service Centre

Our architectural blueprint for a light MVNO


Strategy and Marketing

by the design of a workable governance model. If business, both technically and operationally. This
applicable, we also assist in negotiations with the includes provision of assistance in the organizational
regulator. setup and creation of reporting structures, in rolling
out the network components and initiating opera-
Partner management also plays an important role tions, in field trials, in the integration of the content
in content acquisition, and we support the relevant platform and in the implementation of the immedi-
concept design and negotiations. ate going-to-market strategy measures.

Strategy, business plan, content concept, as well Our job is completed once the network is up and
as architecture and operations concepts are then running and successfully commercially launched.
fine-tuned and supplemented by inputs from host
MNO agreements, content provider and sourcing
contracts. The precise definition of service level a- Client Benefits
greements (SLA) is a major part of operations
concept detailing and contract negotiation. Finally, MVNO aspirants benefit from a thorough upfront
sufficient testing is performed to obtain reasonable screening of the chances for success of an MVNO
assurance of the workability and practical perform- business in the target market, as well as of the project-
ance to be expected. ed financials and the associated risks. We recommend
promising approaches and strategies and investigate
Implementation and Launch Module: the market for potential MNOs right from the start.
We accompany our clients in setting up their MVNO

Strategy, Infrastructure & Product Operations


Strategy & Infrastructure Product Operations Fulfillment Assurance Billing &
Commit Lifecycle Lifecycle Support & Revenue
Management Management Readiness Management

Marketing & Offer Management Costumer Relationship Management

Service Development & Management Service Management & Operations

Resource Development & Management Resource Management & Operations

Supply Chain Development & Management Supplier/Partner Relationship Management

Enterprise Management
Strategic & Enterprise Enterprice Risk Enterprise Effectiveness Knowledge & Research
Planning Management Management Management

Financial & Asset Stakeholder & External Human Resources


Management Relations Management Management

Business Process Framework (eTOM)


Innovation Services

Program management
Clients receive strategy and business plan blueprints,
architectural and operational concepts, as well as re- Strategy, commercial Telecom/IT platforms Content platforms
and contracts and operations and handsets
quirement specifications as a basis for a substantiated workstream workstream workstream

go/no-go management decision. Strategy Owner Contributor Contributor

Product definition Contributor Contributor Owner


Furthermore, we use our expertise to achieve better
results for our clients in negotiating the terms and Business plan Owner Contributor Contributor

conditions with host MNO, content partners and sup- Sourcing


Contributor Owner Contributor
Partner selection
pliers.
Host MNO selection Owner Contributor Contributor

Organisation set-up
After finalizing strategy, business plan, technical Operations
Contributor Owner Contributor

architecture and operational concepts for all func-


Our typical project setup
tional areas, we assist the client in rolling out the
MVNO business up to and including commercial
launch, thus ensuring a smooth implementation.

Kick-off Go/no-go Buy Commercial


workshop decision decision launch

Phase 1: Phase 2: Phase 3:

Strategy and Platform design and Implementation and


business plan supplier selection launch

Market forecast and pricing RfP/RfQ commercial lead Contracts sign-off


Strategy, Regulatory aspects Partner selection Setup of reporting and
commercial Negotiations with MNOs Governance concepts controlling organization
and contracts Draft business plan Contracts finalization, incl. Market campaign
workstream Risk assessment content contracts implementation
Sales/distribution concept Final business plan

Network concept RfP/RfQ tech. support Implementation roadmap


Telecom/IT Operations concept Refine operations concept Implementation of network
platforms and Assessment of existing with suppliers, incl. SLA components, OSS/BSS
operations OSS environment Acceptance and inter- and connectivity
workstream Sourcing concept operability tests Setup of tech. organization
Requirements specification Budget planning Field trials

Content business strategy RfP/RfQ tech. support Integrate content platform


Content Content operations mode Content acquisition and in operations environment
platforms Content business plan partner management Establish content
and handsets Requirements specification concept acquisition and partner
workstream management

Our modular MVNO consulting package


Our Services
We offer a broad range of advisory services, as presented in our portfolio matrix.
We position our individual solutions alongside services practices and service clusters.

Strategy and Marketing Corporate Finance and M&A Operations and Technology Management

Commercial and Financial Due Diligence


Strategic Investment Management Network Infrastructure and Operations
Business Plan Analysis and Benchmarking
Feasibility Study Due Diligence
Asset Valuation

Strategic Due Diligence


Transaction Services Investor Business Plan Development Roll Out Plan Review and Benchmarking
Management Assessment

Bankable Business Plan Negotiation


Licensing and Regulatory Affairs Operations Plan Review and Benchmarking
Project Finance

Going-to-Market Strategy Segmentation


Financial Performance Measurement and Network and Process Performance
Target Marketing Product Pricing Promotion
Benchmarking Measurement and Benchmarking
Sales Channels Customer Care

Business Process Reengineering


Optimization Services Organization Development Forecasting and Budgeting
Process Audit and Improvement

Shared Delivery Regionalization and Centrali-


Partner Selection and Sourcing Service and Process Costing
zation Outsourcing and Managed Services

Business Development
Technology Appraisal and Roadmapping
Growth and Transformation

Mobile Virtual Network Operator


Innovation Services Financial Modelling and Financial Engineering Network Planning and Migration
Mobile Virtual Network Enabler

Value Added Services Network Infrastructure Sharing

Contact
Investelecom Inc.
P.O. Box 32643
Ras Al Khaimah
United Arab Emirates

info@investele.com
www.investele.com