Things You Must Know Before Starting Your Own MVNO

I have written articles for BestMVNO on the MVNO space, discussing what an MVNO means for the carriers, dealers and customers; why should I buy from an MVNO, what differentiates MVNOs from each other (and the carrier) and what markets the MVNO serves. With all of your feedback, the one question that surprised me was a very simple one:

Why Start an MVNO?

There is an old joke in the wireless industry that goes like this: if you want to eventually exit the wireless business with $1 million in your bank account, start with $3 million!

It Seems Like EVERYONE is an MVNO These Days!

Obviously, many MVNOs did not take that humorist’s advice and while many big-name companies failed to crack the MVNO code (Disney, ESPN to name just a few), there are a lot of solid, money-making MVNOs across the globe that are flourishing with regards to subscriber growth and increasing revenues. We have witnessed GTCR’s’s purchase of Consumer Cellular for $2.3 billion and its now 4 million customers, the spinoff of Boost to Dish Network and Verizon’s pending acquisition of Tracfone all of which lend more credibility to the MVNO space. AT&T and T-Mobile continue to heavily push their Cricket and Metro brands respectively. Visit any non-exclusive dealers and see the MVNO offerings from all of the Tracfone brands (Simple, Net10, etc.), and other brands such as Lyca, Ultra, Mint, Visible, Red Pocket, H20 and many more which tells us that the MVNO business is strong and continuing to grow.

Consider The Steps Needed If You Really Want To Start An MVNO

(Things to Know And To Ask Yourself!)

Starting an MVNO takes knowledge, planning, financial resources and most importantly, commitment. It’s easy, right?

Let’s start at the beginning. Do you want to become a traditional MVNO, offering talk, text and data services through one of the Big Three Carriers? Or is your niche in the Machine-to-Machine (M2M) space where things such as water and electric meters “talk” directly to providers or is your potential customer base solely involved with the exploding Internet of Things (IoT) market? Do you want your brand posted in all of the independent wireless dealer stores across the country? Finally, do you offer something that the abundance of incumbent MVNOs don’t…… and is that the reason customers will buy from you?

Ask yourself, do I fully understand the wireless business? Do I understand how to make money while I compete with AT&T, Verizon, T-Mobile and all of the aforementioned MVNOs already in place? Can I commit to the magic number of 75,000 to 100,000 subscribers which is becoming the required minimum for MVNOs? Do I have an underlying MVNE, or Mobile Virtual Network Enabler, that every MVNO, regardless of size, needs to help them connect to a network and facilitate all of the necessary transactions like activating a customer, changing a rate plan, issuing credits, etc.? Are you aware that you have to provide billing and customer service to your subs and that when they dial 611 from their handset, the phone rings in your office, not the carrier’s?

Seasoned experts like myself and those at Atrium Unlimited Consulting ([email protected]) have answered these and many other questions and have helped newcomers to the MVNO party get started with either:

1. One of the major carriers
2. An aggregator of smaller MVNOs (I’ll address this later), or
3. One of the many companies that offer an “MVNO in a Box” solution.

We have also created Business Plans that all of these options above will require, showing sales projections, expenses, revenue forecasts and a very detailed narrative on how you will enter and grow in the MVNO space. The carriers are getting very selective in adding new MVNO partners and they may direct you to one of their aggregators or simply say, “no thank you.” It is critical that you demonstrate in your Business Plan the source and level of your funding, your differentiator and your distribution plan.

Let’s Get Started, Here's How

T-Mobile recently appointed three aggregators to handle smaller MVNOs and newcomers to the market. Aggregators like these companies give the option of handling everything from soup to nuts, ranging from simply taking leads and doing sales, to fulfillment and all backroom activities, to letting the new MVNO operate as a standalone, performing all of the functions listed above.

The three companies that T-Mobile is using as of today are:

• Plum (www.plum.mobi)
• Prepaid Wireless Group (PWG) (www.pwgnetworksolutions.com)
• Plintron (www.plintron.com)

Some of these aggregators also support Verizon and/or AT&T in their offerings.

There are also a lot of companies that now offer an “MVNO in a Box” program. To be fair to all, Atrium Unlimited Consulting currently has no relationships with any of these companies but I do know of a few like Reach Mobile (https://www.reachnext.com/) ; Telgoo5 (www.telgoo5.com), MVNOU (https://mvnou.com/) and others. Again, do your homework to find the best solution for you or reach out to us to help you with your search.

Is There Still Room at the MVNO Table?

One group of people that I speak with on a regular basis are venture capitalists and investors and the conversation always comes down to, “is there still room in the MVNO space and can XYZ company make money in it?”

My answer is YES. I previously owned an MVNO, worked for one and helped two get started. Here is what I learned:

• Be in it for the long run.
• Surround yourself with people who know the business, not family and friends (unless they meet criteria number one).
• Have the financial resources to weather any storm.
• Try to be different. I can get unlimited talk, text and data anywhere, why should they buy from you?
• Dot your i’s and cross your t’s. Have a great lawyer who knows the business. Most importantly, know and understand what you are signing. AT&T, T-Mobile and Verizon employ a lot of lawyers, get commitments and terms and conditions up front!

History in the Making

I had the pleasure of speaking last week with David Glickman, Founder and CEO of Ultra Mobile and Mint Mobile, as well as one of the aggregators, Plum. David’s organization has been aggressively pursuing the smaller MVNOs as well as those new to the space with what he called, “terrific results.” He stated that, “if a consumer marketing company or non-wireless entity wants to offer a mobile solution to their customers under their brand name, we can seamlessly handle just about everything to get them started in the business and help them succeed.” David also said that in the case where the MVNO grows at an acceptable rate and can deliver the revenue required to be a direct MVNO, that “they would not just allow, but encourage them to go directly with T-Mobile.”

When we reminisced about David’s decision to start an MVNO, we had a great conversation about his “differentiator” when starting Ultra Mobile. “We were in the international calling business. Making an international call on your cellphone was a non-no…… you had to be with the carrier for six months and leave a deposit if you wanted to dial internationally. At the time 46 million Americans who were living in America but were not Americans had a need to call to their home country and one of the only solutions was to use a calling card. We had the idea to serve this base of customers by adding calling card rates onto their cellular plan.” Ultra had a customer base that had a need, they had a differentiator and a solid plan to bring to T-Mobile.

The rest, they say, is history!

And, when I asked David what he wished he knew back in the Fall of 2012 when he launched Ultra, two things came to mind. “First, never launch a business right before the biggest hurricane in decades hits the East Coast (Hurricane Sandy for those of you who remember)” and second, “I wish I knew how hard it was to properly inter-connect to the Home Network Operator to do the things that you wanted to do. It’s a near impossible thing to do if you don’t have a large staff dedicated to working directly to the carrier.”

Maybe there is something to be said about starting off with one of the companies that offers an MVNO in a Box solution or speaking with one of the aggregators.

It All Sounds Good, How Do I Get Started?

Whatever path is chosen, the wireless business is poised to continue on its growth path with 5G connectivity and handsets now being put into use as well as the explosion of IoT connections. As we start to look forward to a post-Covid return to what was a “normal” life, how many of your customers will continue to work, learn and play remotely?

Stay tuned for next time when I discuss how to actually start your own MVNO. And for those of you that can't wait or need help now, we would love to help you with your journey. Contact Atrium Unlimited Consulting by either visiting https://atriumunlimited.com/ or by email at [email protected] for assistance in getting started. You’ve made the decision, now speak to the experts who can set you on the path to success!

The water is fine, so if you have the knowledge, planning, financial resources and commitment; by all means, jump in! I, like a lot of others can tell you, it’s well worth the trip!

Good Selling!

Jon

PS. I, like many other wireless industry folks, had the opportunity to speak, deliver a keynote, or be interviewed at DSS ’21, the industry’s first event by and for the independent dealers. The event runs through May 31st and there is still time to register as well as watch all of the speakers and content to date. Simply go to link.nwida.org/dss21.