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Our mission: To provide clear, practical and straightforward commercial advice to our clients in the Telecommunications, Media and

Technology sectors

Ethnic MVNOs
Andrew White

Why every MNO should ha ave one
Founding Partner, Piran Partners
+44 7703 496 494 www.piranpartners.com 10 Fitzroy Square, London, W1T 5HP

Agenda

• Ab t Piran P t About Pi Partners • Ethnic MVNOs
– What is an Ethnic MVNO – Economics – Benefits to an MNO of hosting an Ethnic M O f Of MVNO – Accessing Ethnic consumers – Where an Ethnic MVNO fits in an MNO’s portfolio of MVNOs

• Real life case study
– G i i MVNO agreements quickly i mult l countries Gaining t i kl in lt tiple ti ti

• Conclusion

About Piran Partners

MOBILE OPERATORS

Commercially Focused

Experienced

Independent

THIRD PARTIES
Our mission: To provide clear, practical and stra aightforward commercial advice to our clients in the Telecommunications, Med and Technology sectors dia

Piran Partners Engagement footprint

Who are Ethnic subscribers?

•N New i immigrants to a country i tt t • People with family roots in other cou untries • Long term visitors: students, gap yea work experience ar,

• Typically, 10% of the population of a progressive country falls into this group • Plentiful source of new consumers to a country o

Calling Internationally Market price positioning

Representative retail price per international minute (£, (£ GBP)

Quarterly outbound Inter rnational minutes (millions) All UK mobile operator and all fixed operators rs

Source: Ofcom, Oct 2006.

‘Price elasticity’ curve

Representative retail price per international minute (£, (£ GBP)

Quarterly outbound Inter rnational minutes (millions) All UK mobile operator and all fixed operators rs

Source: Ofcom, Oct 2006.

The Ethnic MVNO

Representative retail price per international minute (£, (£ GBP) Large opportunity

Ethic MVNO
Price premium p

Quarterly outbound Inter rnational minutes (millions) All UK mobile operator and all fixed operators rs

Source: Ofcom, Oct 2006.

Benefits of hosting an Ethnic MVNO to an mobile network operator

• Substantial migration of traffic awa from the landline networks ay • Very large market €6 billion across Europe by 2012 market, s • Access to new immigrants – a subs stantial growth area

• How does a Mobile Network Operat address the market? tor • 100% owned subsidiary with n new brand, e g KPN’s e-plus Ayyildiz brand e.g. KPN s • Third party MVNO, e.g. MobileW World, LycaMobile or Lebara Mobile

Accessing the consumers

• P i alone simply d Price l i l doesn’t work, ’t k distribution is key • New immigrants are wary – need to prove the offer is genuine • Need to sell the offer from within the th community it

• Without harming the mobile operator’s own brand’s international price point

Maximising the profits from Ethnic MVNOs

• A national market can support betw ween 3 to 4 different Ethnic MVNOs • Pass responsibility for customer ca to the Ethnic MVNO are • Ensure that national pricing is comp p g mpetitive but not too competitive p • Allow the Ethnic MVNO to route the international traffic o e c O o ou e he e a o a a c

Considering

your

portfolio

How does an Ethnic MVNO fit your MVNO portfolio?

Traditional wisdom has it that a MVNO portfolio should an comprise large:
– R t il Retailers – Brands

How does an Ethnic MVNO fit your MVNO portfolio

Traditional wisdom has it that a MVNO portfolio should an comprise large:
– R t il Retailers – Brands

We dis g sagree.

How does an Ethnic MVNO fit your MVNO portfolio

Traditional wisdom has it that an MV VNO portfolio should comprise large:
– Retailers – Brands

• We disagree.

• Optimum MVNO portfolio sho ould comprise:
–MVNOs with distribution – e.g. re MVNOs etailers –MVNOs with a very differentiated proposition – e.g. Ethnic MVNOs d –Diversified portfolio of other MVN Diversified NOs

Implementing an Ethnic MVNO

Mobile Network Operators need to o:
• Allow the Ethnic MVNO to carry the Inte ernational Traffic. – They need to, as it is an important diffe erentiator • Check the Ethnic MVNOs proposition – Where is the proposition positioned in relation to the market? • Check the Ethnic MVNOs distribution

– Is it multi-Ethnic?

Is it effective? And will it reach the target consumers?

• Check the Ethnic MVNOs probity – Th calling card market h hi t i lly b The lli d k t has historicall been associated with d bi i t d ith dubious practices ti

Real Life Example Piran P Partner’s Cli ent

Lebara Mobile
• Europe’s #1 Ethnic MVNO • 7 MVNOs across Europe • Launching more in 2007 • Over 500,000 users • ARPU over €20 • UK’s 4th fastest growing privately h ld company i t l held

Piran Partners Methodology VPP VPP™ (Virtual Partner Programme)

• 3rd Party – VPP for MVNOs
Engagement process used to secure wholesale agreements with mobile operators for third parties parties.

Piran Partners Methodology VPP VPP™ (Virtual Partner Programme)

• 3rd Party – VPP for MVNOs
Engagement process used to secure wholesale agreements with mobile operators for third parties parties.

• Operator – VPP for Carriers
Process enables operator to define or improve their wholesale strategy, identify which partners to target and which products and services to offer, while understanding the operational impact on the business.

Proposition Development

Proposition Development

• The Science and the Art of pricing • Use the Price Sensitivity y Meter and Focus Group research

Financial wholesale modeling

Five Top Tips

Gaining MVNO agreements Gii t

• Get the story straight
– Don’t approach MNOs until the story and strategy stands up from all angles

• B realistic Be li ti
– Both with revenue projections and timeline expe ectations

• Being conscious of the MNO’s hidden h hurdles
– Hidden icebergs waiting to hole your pitch

• Ensure that everything is consistent
– Often two levels of detail in advance

• It takes longer than expected
– Be patient

Conclusions

Conclusions

• Eth i MVNOs represent a substanti l opportunity Ethnic MVNO t b t ti ial i t it • Third party MVNOs have been more successful than 100% owned subsidiaries of MNOs • Don’t put the MNO’s brand at risk by launching a branded tariff plan y • The MVNO market is currently very r receptive to well presented propositions with experienced mana agement teams

Contact Piran Partners

Andrew White
Founding Partner, Piran Partners Partner
+44 7703 496 494 www.piranpartners.com www piranpartners com 10 Fitzroy Square, London, W1T 5HP

Contact Piran Partners

Andrew White
Founding Partner, Piran Partners Partner
+44 7703 496 494 www.piranpartners.com www piranpartners com 10 Fitzroy Square, London, W1T 5HP