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MVNO Business Models and New Entrant Strategies

We believe the days of 'discount driven' MVNOs are numbered. Future MVNO success stories will be based on 'value added' positioning. In some cases this may be achieved on the back of a strong brand and very effective marketing as in the case of Virgin Mobile. However we also expect to see future MVNO successes emerge from specialist MVNOs targeting the needs of substantial and well-defined groups. Examples include MVNOs addressing charity, ethnic/immigrant, and international traveller groups. Detailed examples are presented in the current report.

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1
Overview
1
1.1
MVNO Definition
1
1.2
MVNO Categories
1
2
MVNO Business Models
3
2.1
Critical Success Factors
5
2.2
Financial Implications
6
2.2.1
Set-up Costs
6
2.2.2
Operational Expenses & Revenue Margins
6
3
New Market Entrant Strategies
9
3.1
Discount Providers
9
3.1.1
Telmore's Model
10
3.2
Niche and Value-Added Providers
12
3.2.1
call4care Targeting the Charity Segment
13
3.2.2
Movida Focus on Ethnic Communities
13
3.2.3
Transatel Offering Multi-Country Services
15
4
Virgin Mobile Performance in the UK Market
17
4.1
Background
17
4.2
Supply Agreement with T-Mobile
17
4.3
Basic Service Offer & Key Target Segment
18
4.4
Competitors' Offers
19
4.5
Move to Target Contract Segment
21
4.6
Value Added Service Propositions
23
4.7
Market Impact
25
4.8
Key Factors Behind Virgin's Success
27
4.8.1
Examples of Marketing Initiatives
29