MVNO offerings to strengthen customer ties

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By: Wise Marketer Staff |

Posted on March 15, 2006

High profile brands such as Google and Harley Davidson will soon have more opportunities to get closer to their customers by becoming MVNOs (mobile virtual network operators), according to a white paper entitled 'MVNO 3.0' by management consultancy DiamondCluster International.

In the USA at least, the ranks of high profile brands entering the MVNO market are expected to grow as a new breed - called Mobile Virtual Network Aggregators (MVNAs) - emerges to provide other brands with complete solutions for launching branded wireless offerings.

According to Hamilton Sekino, a partner in DiamondCluster's Telecoms practice, "Just as big brands with large, loyal customer bases can offer credit cards without becoming banks, turn-key solutions from MVNAs will make introducing a wireless product technically and financially attractive for those brands that want to generate incremental revenue, promote existing services, and boost customer loyalty."

Relationship builders
But, Sekino points out, unlike credit cards, wireless offerings will enable companies to strengthen customer relationships through consistent communication and also to capitalise on the current wireless craze: "We've identified ninety brands that could be MVNO candidates. Imagine daily encouragements from your Dr. Phil mobile phone, or exercise tips from your Nike-branded wireless device."

Forecast for 2010
DiamondCluster projects that mobile telecoms will account for more than 50% of US telecom customer spending by 2010 (equivalent to a US$170 billion market). Mobile data and video is expected to grow from around 3% to 9% of US telecom customer spending in the same period, representing a market of some US$30 billion.

DiamondCluster also expects MVNAs to power a portion of this growth in the mobile market. MVNAs will enable new players to enter the wireless market because they provide outsourced management of all levels of the wireless service delivery chain, short of branding and product distribution. This includes the network, back-office operations, the mobile data platform, handsets and the actual wireless offer (pricing, user interface and content and applications.)

However, the company is still uncertain which types of organisation will assume the role of MVNA. "Right now the field is wide open," Sekino said. Competitors for the market could potentially include mobile operators such as Verizon, successful MVNOs such as Virgin, Mobile Virtual Network Enablers (MVNEs) such as Visage, and OEM handset manufacturers such as Motorola.

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