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MVNO’s: What’s Your Differentiator?

MVNOs Must Differentiate To Survive
MVNOs Must Differentiate To Survive

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Differentiator, Verb. Recognize or ascertain what makes someone or something different.

There are dozens upon dozens of MVNOs in North America. True, the big national guys hold the majority of market share. But for every Tracfone, Boost Mobile, and Consumer Cellular, there are some small, and mostly efficient MVNOs that have carved out a niche for themselves. With well over 40 million subscribers, MVNOs are an important distribution channel for the three major carriers. But why should a customer buy from LycaMobile, Simple Mobile, Red Pocket, or H20 Wireless?

Differentiation

The answer is differentiation. Which MVNO serves an individual’s needs better? Let’s start with the basics; unless your business (or customer) needs a pure M-2-M solution, every voice and data offering includes unlimited talk and text as the entry point. Then comes data. In the past few years, Unlimited Talk, Text & Data plans were priced solely on how much data you thought you would use on a monthly basis: 1 MB? 1 GB? 5 GB, and so on. It wasn’t long ago that data plans were priced at $10 increments based on the amount of data that the plan included. Unlimited Talk, Text, and 1 GB of data was $39.99 per month, Unlimited Talk & Text and 3 GB was $49.99 and UT&T with 5GB was $59.99.

As T-Mobile moved to unlimited data, Verizon and AT&T followed. Soon many MVNOs had the opportunity to offer unlimited data to their customers as well (albeit with either with a hard cap where the customer is eventually throttled, or the provision that in heavy traffic time periods the carrier could “slow” your speed to gain network optimization).

MVNOs: Finding A Niche

So now with the level playing field, MVNOs had to find their niche or differentiation. Some choose to offer unlimited calling to certain geographic regions around the world. Some MVNOs cater to the Far East (H2O, Red Pocket) with unlimited international calling to Japan, Vietnam, and other countries in that region. Others cater to Mexico or Central and South America (Simple Mobile for example).

The prepaid market was, in part, built on immigrants and first-generation Americans who needed to find an inexpensive way to talk to their family members back home. Today’s American MVNOs are each trying to capture a larger part of the overall wireless pie by offering something different. And with the marketing power of Verizon, AT&T, T-Mobile, and the larger MVNOs that are mentioned above, it is more critical than ever for MVNOs to market themselves in a way that is different from the rest and shows value to potential subscribers.

Targeting Your Base

While some  MVNOs like US Mobile are offering free Netflix, Hulu, and HBO Max (plus others) to their multi-line customers, most MVNOs likely will not be able to offer free streaming services the same way that the Big Three carriers do. They can however market to their targeted base with features and benefits like unlimited data, unlimited international calling, value-added services like adding low-cost add-ons or discounts for customers of 55+ years of age. Look what Consumer Cellular accomplished by catering to the over 55-year-old market, reported to have over 4 million subscribers, and was recently bought out for $2.3 billion!

See also:  To Niche or Not to Niche? That is the Question MVNOs Must Ask!

The business is out there, or there wouldn’t be a score of MVNOs. Those who have solved the differentiation side have taken a large step forward. However, there's still one more piece of the puzzle to master, and that’s Distribution. We’ll speak about that next time!

Good Selling!


Jon Horovitz
Jon Horovitz has been in the wireless industry as a senior executive for 30+ years. He headed up sales and operations in leadership roles for McCaw Communications, AT&T Wireless, Nextel, Boost Mobile, and Sprint. He has owned an MVNO as well as assisted in the start-up of three others. His consulting company, Atrium Unlimited, LLC advises carriers, MVNOs, investment bankers, and venture capitalists interested in joining the wireless space. Jon would love to hear from you about any consultative needs you may have. Please visit https://AtriumUnlimited.com




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