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The New MVNO Model

The New MVNO Model

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A lot of us like to harken back to the good old days when life was simpler, things were clearly defined and it was easy to figure out who did what and where to go for your everyday needs.  The corner drug store was for prescriptions and maybe a chocolate malt.  Three channels gave us all of the entertainment that we needed, and yes, we actually did play outside until the streetlights came on!

But the world went from black and white to color, the suburbs sprawled and a thing call communication went from the fixed phone on the wall to communicating all over the world with a touch of a button, from literally anywhere, consuming us and blurring the lines between suppliers, providers and where to go to get what I need.  

Visit a Target or Walmart today and you could spend a day getting groceries, clothing, electronics, medicine, wireless products, a Starbucks latte and even get your taxes done.  Convenience has replaced specialization; you need to look no further than your computer or phone screen to order anything anytime and have it delivered within hours to your home.  I personally like going to a store touching the item that I am going to purchase and hopefully interact with a knowledgeable salesperson or business owner.  Those days, I’m afraid, are limited as well.

The New Paradigm

I never claimed to be a luddite (a person opposed to new technology) and the world that we live is no longer defined with regards to providers/consumers. We have choices (for better or worse).  Let’s look at the cable industry and how it is disrupting the wireless world.

Comcast and Charter are now into their fourth full years of operation and have put on over 7.5 million mobile customers combined.  Charter CEO Tom Rutledge recently stated that their Spectrum Mobile unit is now profitable as a stand-alone business.

Rumors of Cox Cable jumping in and WOW Cable announcing an MVNO agreement with Reach Mobile has put most people in the industry on notice that blurred lines will continue and “bleed over” from traditional stand-alone mobile or cable carriers is a thing of the past.  Comcast stated that bundling is no longer about packaging cable with the internet; it’s now about cable and mobile.  But Comcast and Charter, and probably most cable operators, have a distinct advantage in the customer acquisition game; the people that they are marketing wireless services to are already their customers!  And once the big boys can figure out how to bill mobile services on the same bill as their triple-play offerings of home phone, cable and internet, watch for the next big growth in their mobile business.

Is Wireline Back?

Another interesting move that highlights this burring happened a few weeks ago when Red Pocket Mobile announced that they will be selling Business Plans via a partnership with Vonage.  As Joe Paonessa wrote in BestMVNO last week, The "MVNO phone plans for your business" model does seem to be largely untapped, or at least not heavily marketed by the MVNOs that offer it.”

He listed the added features to Red Pocket’s current $30 plan that includes 25GB of high-speed data per line:

  • Access to mobile and desktop apps for cloud-based calls, texts, and lead meetings
  • Unlimited team meetings with video collaboration
  • Call forwarding to multiple extensions
  • Voicemail transcriptions
  • A virtual assistant to help answer calls
  • A free local company number, additional numbers are $9.99/month. So customers can have two numbers. Their Red Pocket number plus the additional number from Vonage

Additionally, Joe asked Jeff Moore, Principal of the firm Wave7 Research what he thinks about this new partnership. He commented: "This is a good move for Red Pocket. Too many MVNOs neglect business sales and the partnership with Vonage makes sense for winning business accounts."

“Neglect business sales………” This got me wondering……how many other MVNOs saw an opportunity like this but failed to act on it?  What other opportunities are out there that you can capitalize on?  I know that you’re probably tired of hearing me drone on every month about how you should be capitalizing on the coming IoT wave but from what I’ve seen during the annual Tax Time offers from carriers and MVNOs alike, both big and small, the “race to the bottom (of pricing)” has never been stronger.  The time is NOW for YOU, the imbedded MVNOs to search out new customers and revenue opportunities like a savvy Red Pocket Mobile just did last month.  I spoke last time of one such company using their current MVNO agreement to engage in tracking shipments, not only for GPS information but temperature, handling, and other analytics to ensure the safe delivery of their customer’s products.  Another one of Atrium Unlimited Consulting’s clients is focused on the security sector and enjoying a very high revenue per subscriber by providing extra layers of security to their customer’s handset and SIM cards.

Ask yourself…… what has my team done to help our company with innovation?

A Model to Succeed

There is no argument that in the long run, the Tier 1 Carriers will not only survive but prevail in the pure wireless subscriber acquisition space.  The National Independent Wireless Dealer Association (NWIDA) writes of multiple lawsuits by exclusive T-Mobile/Sprint Dealers against their mothership, T-Mobile (More dealers sue T-Mobile - NWIDA). NWIDA President, Adam Wolf told me today that “the carriers need to do a better job of supporting and taking care of their indirect distribution instead of throwing roadblocks up.  Going back in history, the carrier’s business was built on the backs of the independent dealers.”

With that being said, it is now more important than ever to diversify your offerings.  Anyone can offer a low price.  Innovators offer unique opportunities to their customers and command a higher price for their services.  What is your MVNO doing to “blur the lines” and give your subscribers something that they didn’t expect?  Life isn’t simpler as I stated above, it’s complicated and you need to adapt.

Atrium Unlimited Consulting (atriumunlimited.com) can help move you in the right direction.  Give us a call and we’ll share case studies of companies just like yours that are breaking barriers with new offerings and differentiation.

Thanks and Good Selling!

Jon



Jon Horovitz has been in the wireless industry as a senior executive for 31+ 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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