Presentation on MVNO - PowerPoint PPT Presentation

1 / 19
About This Presentation
Title:

Presentation on MVNO

Description:

Presentation on MVNO ( Mobile Virtual Network Operator) Mobile virtual network operator A Mobile Virtual Network Operator (MVNO) is a company that provides mobile ... – PowerPoint PPT presentation

Number of Views:1884
Avg rating:3.0/5.0
Slides: 20
Provided by: Vikr3
Category:

less

Transcript and Presenter's Notes

Title: Presentation on MVNO


1
  • Presentation on MVNO
  • ( Mobile Virtual Network Operator)

2
Mobile virtual network operator
  • A Mobile Virtual Network Operator (MVNO) is a
    company that provides mobile phone services but
    does not have its own licensed frequency
    allocation of radio spectrum, nor does it
    necessarily have all of the infrastructure
    required to provide mobile telephone service.
  • MVNO purchase wholesale mobile minutes and resell
    to end-users.

3
  • MVNOs are roughly equivalent to the "switchless
    resellers.
  • It works independently of the mobile network
    operator and can set its own pricing structures,
    subject to the rates agreed with the MNO.
  • They do not have their own SIM-cards and the
    services provided by service providers depend on
    the services of the hosting MNOs .

4
Background and history
  • The emergence of the MVNO model in a market is
    often a result of two factors-
  • 1) To lower the barriers for market entry and
    ultimately increase competition.
  • 2) A strategic decision by an MNO looking to
    extend its existing operations and target niche
    or undeserved segments through a second or
    perhaps multiple brands.

5
  • The efficiency is obtained because an MVNO
    doesnt incur the significant capital expenditure
    on spectrum and infrastructure that an MNO.
  • The regulator forced Host Network Operators
    (HNO's) to open their network it created a
    potential competitor for them. They were being
    forced into a commercial relationship that would
    eventually have a negative impact on its revenues.

6
  • Conversely and more recently many mobile network
    operators believe that there is merit in
    operating a wholesale MVNO business unit, to
    compliment their retail model.
  • The first commercially successful MVNO in the UK
    was Virgin Mobile UK, launched in the United
    Kingdom in 1999 and now has over 4 million
    customers in the UK. Virgin replicated its UK
    success through its US operation Virgin Mobile
    USA.

7
Mobile operators and MVNOs
  • There are three primary motivations for mobile
    operators to allow MVNOs on their networks. These
    are
  • Segmentation-driven strategies
  • Mobile
    operators often find it difficult to succeed in
    all customer segments. MVNOs are a way to
    implement a more specific marketing mix, whether
    alone or with partners and they can help attack
    specific, targeted segments.
  • Network utilisation-driven strategies
  • Many
    mobile operators have capacity, product and
    segment needs. An MVNO strategy can generate
    economies of scale for better network
    utilisation.

8
  • Product-driven strategies

  • MVNOs can help mobile operators
    target customers with specialised service
    requirements and get to customer niches that
    mobile operators cannot get to.

9
Virgin-Tata Deal
  • Virgin Mobile is present in six countries the
    US, the UK, France, South Africa, Australia and
    Canada.
  • Virgin Mobile India, a 5050 joint-venture
    between UKs Virgin Group and Tata Teleservices
    (TTSL)
  • It is based on co-branding/brand franchising
    model.
  • Tata Tele will pay Virgin a royalty for the use
    of its brand and a share, per subscriber, of its
    future revenue. Tata Tele will take care of
    billing and customer care, refrain from selling
    airtime minutes in bulk to Virgin, and retain its
    subscribers.

10
  • What Virgin would do is bring its customer
    service expertise to the table and help Tata Tele
    train its call centre staff. This is a better way
    to enter into the growing Indian telecom market.
    There is no capex burden and the exit option is
    also easier.
  • The urban youth mobile services revenue is
    expected to cross Rs 35,000 crore by 2010.

11
Controversy
  • The Cellular Operators Association of India
    pointed out that the partnership between Virgin
    Group and Tata Teleservices has taken place
    through the back door under Mobile Virtual
    Network Operators (MVNO) route to enter into the
    Indian telecommunication market.
  • The group further pointed out that the present
    Indian telecommunication licensing agreement
    clauses prevents buying of mobile capacity from
    an existing operator and subsequent selling of
    mobile services under its name is also prohibited
    under the law.

12
  • The authority of reallocation of spectrum lies
    with the Indian Department of Telecommunication.
  • Pointing out that MVNOs definition worldwide
    included two things buying of bulk air time
    under contract from an operator reselling of
    minutes as well as customer ownership, Tata
    Teleservices said, None of these are applicable
    or relevant to TTLs launch of Virgin Mobile
    branded services.

13
  • As per the agreement, there would be two brands
    Tata Indicomm and Virgin. While Tata Indicomm
    would be positioned as a mass-market brand,
    Virgin would be positioned as a youth brand.

14
Key Reasons for the deal
  • The surveys and reports showed that Tata were not
    able to penetrate the youth segment as they had
    done with other customer segments.
  • For the Tatas, the current move was an attempt to
    gain ground as they had a market share of less
    than 10 ( around 7.1).
  • The company had tied up with Virgin due to its
    better recall value and positioning among youth
    globally.

15
Advantages
  • This deal gives it a first-mover advantage.
    Whenever regulations permit MVNOs to operate in
    India, Virgin would already be a recognised
    brand.
  • When Tata Tele offer GSM services , the current
    relationship can be easily tweaked for a GSM run.
    It's a win-win situation for both sides.
  • The move will give Virgin Mobile instant access
    to Pan-India network.
  • Tata Tele they will get a recognized brand with
    a sound marketing plan to attract more
    subscribers.

16
  • Thus the operator gets to maximise returns on
    spectrum while the foreign player rakes in
    revenues without having to buy airtime.
  • The high churn rate (once number portability
    kicks in) will also help them.

17
Indian Challenge
  • Countries like India or China, where consumers
    are price-conscious, larger operators are in a
    better position to offer competitive pricing due
    to economies of scale.
  • That may be a (better) way to enter the market,
    but they may have no significant market share at
    the end of the day.
  • The profit margin of MVNOs rarely crosses 20,
    and with the prepaid segment being a low-paying
    market, the business plan and positioning has to
    be right.

18
  • The brand hype will die after sometime, and then
    it will all boil down to quality of service,
    pricing and product suitability.

19
  • !!!!!! Thank You !!!!
Write a Comment
User Comments (0)
About PowerShow.com