MVNO Monday: MVNOs World Congress Special

8 May 2017

Speaking at the MVNOs World Congress in Nice, France last month Pablo Freire, Chief Strategy Officer of Spanish operator MasMovil, shed light on his company’s ‘smart combination of owned and third party infrastructure’, as it moves away from its MVNO roots. The company – which completed the acquisition of Yoigo, the country’s fourth MNO, from Telia last year – had previously struck deals for a series of MVNOs, and has also acquired significant fixed line assets in recent years. As such, MasMovil’s chief investment will be in its fibre-to-the-home (FTTH) deployment, rather than expanding Yoigo’s mobile network, which currently spans around 4,500 cell sites, and is augmented with national roaming agreements with Orange and Movistar. MasMovil will deploy no more than 300 new cell sites a year, while the FTTH network (which currently passes one million homes) will be extended to four million homes by 2019. In the mobile space, the company will have a three-pronged branding strategy: Yoigo (data-centric, but offering better value than the other MNOs); MasMovil (the cut-price ‘fighter’ brand); and Pepephone (ethnic focus).The company will seek to optimise its network costs by migrating the MasMovil and Pepephone mobile traffic onto the Yoigo network at a future date. Finally, befitting its MVNO roots, the company intends to be ‘very active in the wholesale business’ and will seek to work with smaller, regional MVNO customers.

Things are progressing altogether less smoothly in Iran, however, with David Whitefoot, the Senior Advisor to Fanap ICT Holding of Pasargad (Fanap Telecom), telling the audience about the difficulties faced by Bank Pasargad in its attempts to secure an Iranian MVNO concession. Almost two years after embarking on its pursuit of a virtual operator licence – as one of 51 initial applicants – the financial institution has found its progress delayed by both a lack of regulatory support and a hostile pricing model from the local MNOs. Despite an initial USD2.5 million price tag for the first part of the licensing process, and an additional USD1.5 million fee applicable to Full MVNOs, the company has seen little in the way of tangible progress. As things stand, Mr Whitefoot conceded that the licence is ‘not financially viable’ as there is ‘not enough money to go round’. To compound the situation, MVNO concessions are only said to be valid for five years. As things stand, of the initial 51 applicants, 24 companies were issued pre-licences, but just four companies currently hold Full MVNO licences, and none have successfully progressed to a commercial launch.

On a more positive note, Julian Ogrin, CEO of amaysim, Australia’s largest MVNO, told the audience that the firm views itself as less of a telecoms operator, and more of a ‘tech company changing the experience of telcos’. Because it has a pre-paid business model, amaysim has strong cash-flow, and last month acquired utility provider Click Energy for AUD120 million (USD89 million), as part of its plan to ‘extend its range of services to Australian households’. The next stage of the converged service plan came to fruition on 4 May, when amaysim launched its brand new home broadband product, via the nbn. Going forward, Amaysim seeks to exploit ‘the power of cross-selling – with a digital experience’ and now has around 750,000 addressable homes to cross-sell to. The Vaya sub-brand (acquired on 1 January 2016) will continue to play a key part in amaysim’s strategy, meanwhile, and was referred by the chief executive as a ‘street-fighter’, which will seek to compete at the cut-throat low-budget end of the market.

In a key development of note Singapore-based mobile virtual network enabler (MVNE)/mobile virtual network aggregator (MVNA) Plintron was unveiled as the new strategic partner of Surf Telecom, the Brazilian MVNE which holds wireless spectrum in Sao Paulo. Yon Moreira da Silva, CEO of Surf Telecom, confirmed that the recent launch of Correios Cellular, which is owned by the Brazilian post office, represented the duo’s first official MVNO collaboration. He noted: ‘The launch of Correios Cellular required a scalable telecom network, along with extensive experience in multi-country integrations with complex networks and launching multiple MVNO brands. Plintron is the world leader who fulfilled our business need as a strategic partner. Correios Cellular services will likely be sold to subscribers at more than 3,600 locations and 12,400 counters across Brazil by the end of 2017.’

Also at the event, YuanTel of China confirmed that it is the country’s second-largest MVNO, behind Snail Mobile, and it has done this without a retail store presence, or a big-name brand. The MVNO, which uses the China Unicom network, divides its operations up into 21 regional franchises covering 45 cities, and to date has avoided the west of the country entirely.

Finally, speaking as part of the conference’s ‘Wholesale as a Service’ track, Paul O’Sullivan, Head of Wholesale Commercial for Telefonica UK (O2 UK), noted: ‘The only reason we say no to an MVNO is if we don’t think they will be successful.’ Discussing the recently launched Sky Mobile – which is targeting three million subscribers by 2020 – he conceded: ‘We fully expect a chunk of those to come from our retail brand, but added ‘It is better to have Sky on our network than on someone else’s’.

In other MVNO news, Austrian mobile virtual network enabler (MVNE) Ventocom has confirmed that it will activate its long-rumoured Slovenian MVNO, HoT Mobil Slovenia, on 11 May. The MVNO will piggyback on the A1 Slovenia (formerly Si.mobil) network. According to local news site Uporabnastran, Ventocom Slovenia is listed as the sole shareholder; the local holding company is owned by Ventocom (95%) and company director Eva Aljancic (5%). TeleGeography notes that the original HoT MVNO was launched in Austria in January 2015, by Austrian discount supermarket chain Hofer, although the retailer does not appear to have an equity stake in the new Slovenian offshoot.

Optus Wholesale has announced an exclusive five-year post-paid mobile partnership with new MVNO Moose Mobile that will deliver customers access to the Optus national ‘LTE Plus’ (LTE-Advanced [LTE-A]) network via Moose’s range of refurbished late model handsets (Android and non-Android) at heavily discounted prices. Moose Mobile will prioritise the youth segment with a combination of refurbished handsets and SIM offers. Dean Lwin, CEO of Moose Mobile, commented: ‘The Moose model is about providing quality refurbished devices that are current and inexpensive, bundled with competitive pricing plans on a quality network … By providing access to a SIM at the point-of-sale, Moose will be able to convert a one-off handset sale into a long standing customer.’

Norwegian electricity provider Fjordkraft has begun offering MVNO services over the Telenor Norge network. Fjordkraft, which is owned by BKK, Skagerak and Statkraft, seeks to sell the virtual service to its roughly one million residential electricity customers, and promises to offer heavy discounts to its existing customers. Fjordkraft managing director Rolf Barmen commented: ‘The company is investing heavily and has the ambition to get 200,000 customers by 2020. We have the financial muscle to invest long-term. The market is controlled by two players. To create real competition, I think our experience of working with the framework of the energy market will be a critical success factor, [and help us] to find a sustainable business model within the discount segment.’ The MVNO went live on 25 April.

Finally, x-Mobility, the 4G MVNA for Three UK has informed TeleGeography that it is now offering its wholesale MVNO partners inclusive European data roaming with their UK 4G data bundles, and without the restriction of only being able to use a minor percentage of the data when abroad (i.e. non-permanent roaming). X-Mobility claims that the move will enable MVNO brands to extend their service offering to include the whole of Europe, and will also assist brands wishing to target in-bound travellers, who may not be using the majority of their data within the UK.

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