It’s clear how the MVNO market has matured and how bright its future is with 5G coming on stream. No longer are we fixated on the opportunities for B2C that migrant markets, supermarkets and multi-play bring – though they do of course still bring a multitude of opportunities – instead attention is moving at speed to B2B and in particular IoT.
Gartner predict some 25 billion IoT device end points by the end of 2021It was already driven by everything from smart cities to our need to solve major agricultural problems like feeding the world’s population more efficiently, but Covid-19 has accelerated thinking and the necessity to implement solutions.
Those extraordinary predictions from Gartner are entirely possible when you look at the amount of investment going in and the urgency provoked by the pandemic. You just need to look at Vodafone’s repeated ambition to expand its narrowband IoT footprint in Europe to see how committed the big boys are.
With investment comes opportunity for growth and innovation. Small IoT specialists are springing up everywhere and fuelling the new ecosystem.
This all plays into the hands of MVNOs as nothing is possible without connectivity. And as mobile is at the forefront of this emerging world, so MVNOs can take full advantage in verticals that need mobile connectivity.
How so? Well, it’s due to the resilience and flexibility of the MVNO model.
Fact 1. MVNOs heritage of problem solving means that they can now deliver more rapidly: Typically MVNOs have had to work around network connectivity complexity. They’ve done this by developing in house systems for connecting services and SIMs. It’s made them faster and more flexible than the MNOs and it’s given them an added capability they can trade on.
This is especially true for full MVNOs, which have benefited from the flexibility that owning the HLR/HSS, IMSI and number ranges provides – by using multi IMSI solutions MVNOs can build a large geographical footprint and provide a seamless transition across borders. Throw in the emerging E-SIM capability and you have some exciting opportunities.
Cubic Telecom is a great example of this approach to sweating the assets. Originally a consumer roaming proposition it pivoted into IoT and connected vehicles, and with coverage in over 180 countries it’s easy to see why Volkswagon Audi Group made investments in Cubic – how else would 50,000 new connected vehicles roll off production each month? Last year Cubic made a bold 5G statement, securing a further $26.4m funding as part of its strategy to get ready for the technology.
Fact 2. the mindset is in IoT gear: The MVNO mindset is more entrepreneurial than the big networks’. An MVNO isn’t preoccupied with plastering its consumer brand all over the customer offer, nor do they entertain complex governance or have intragroup stakeholders to appease. This makes them inherently agile and quick to respond to the market. It puts them in a position whereby they can roll out a full service before you can say internet of things.
Interestingly, there’s a future case to say MVNOs don’t need to be virtual. They could get a slice of a 5G network and run it themselves, slicing it further to create private networks for major campus style operations like airports, or universities.
Fact 3. Enterprises like MVNOs: The companies buying IoT services like challengers. I’ve seen it with my own eyes. They get the model, they get the agility, and they want the benefits it brings like yesterday.
From their perspective a challenger MVNO brand is a perfect partner so long as they have a quality network behind them. Buyers are happy to trade speed to market and first mover advantage against partnering directly with a mobile network. And they get this because the challengers have more agile software development – the MNOs are improving but they still have a long way to go in terms of agile mindset and delivery. In the next 12 months we will see this outlook manifest further as robots are put to work on manufacturing production lines.
That’s why I think for Ofcom’s predictions of 160million IoT connections in the UK by 2024 are to play out it’s going to take MNVO / enterprise partnerships to make it happen.
About the author
James Gray
Managing Director at Graystone Strategy
James has over 25 years of experience working in the telecoms, MVNO and retail industries. He is an expert in subscription based business models, CRM, direct and indirect channel management and major proposition development and launches. He has held a number of Marketing Director & Consumer Director roles with mobile networks and retailers and now advises boards and start-ups on business and marketing strategy.